#7 - Kellogg (NYSE:K)
The last stock on the list is Kellogg (NYSE: K). The food manufacturing company is known for its breakfast cereals and other convenient, packaged items such as Eggo frozen waffles makes this list for one reason, its dividend.
Last year, the company broke a 15-year streak of increasing dividends and that made the stock less attractive for value investors. Kellogg is a notoriously low-growth stock in a sector that has tight margins. That makes the dividend of premium importance.
So when the company reported earnings in early February, it was significant news that the company is planning to increase the dividend at some point in 2021. Although the company is likely to see revenue revert back to pre-pandemic levels, an increased dividend should help this stock move higher. It’s currently down about 4.5% for the year. For value investors willing to hang on, they are likely to get a little capital growth as well.
About Kellanova
Kellanova, together with its subsidiaries, manufactures and markets snacks and convenience foods in North America, Europe, Latin America, the Asia Pacific, the Middle East, Australia, and Africa. Its principal products include crackers, crisps, savory snacks, toaster pastries, cereal bars, granola bars and bites, ready-to-eat cereals, frozen waffles, veggie foods, and noodles.
More about Kellanova- Current Price
- $82.37
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 13 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $77.96 (-5.4% Downside)
The strategy of looking for undervalued stocks is sometimes called value investing. Growth investing has easily beaten value investing over the past decade. However, with the market beginning to look very frothy, value investing may be making a comeback in 2021.
Like all investing strategies, value investing can be subjective. Two investors may look at the same stock and come to two different conclusions.
However, one of the key benefits of value investing is that it is one of the best strategies for managing risk while getting an attractive return. This is because many, though not all, value stocks pay dividends. This can help boost a stock’s total return, particularly since many of these stocks are not known to deliver rapid growth.
And many investors enjoy the ability to invest in specific equities rather than being locked into an exchange-traded fund (ETF) or mutual fund. While those assets are perfectly fine investments, there is less flexibility for investors who enjoy picking their own stocks.
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