Amid the bustling stock market, undervalued companies often linger in the shadows, overlooked by many investors chasing after high-flying stocks. But these hidden gems can offer steadfast growth and reliable dividend returns, quietly compounding wealth for astute shareholders over time.
Within the NASDAQ 100, there lie three such companies that beckon to shrewd investors, promising long-term profitability and consistent dividend payouts.
PepsiCo (PEP)
Source: FotograFFF / Shutterstock
PepsiCo (NASDAQ:PEP) stands tall as a global titan in the realm of beverages and snack foods, boasting a product line that includes iconic brands such as Pepsi, Lay’s, Doritos, and Mountain Dew.
Despite a modest 5% dip in its share price over the past year, PepsiCo reported a remarkable surge of nearly 150% in net income for the fourth quarter of 2023. Looking ahead to 2024, the company projects a 4% increase in revenue and plans to initiate stock buybacks worth up to $1 billion.
What’s more, PepsiCo’s recent 7% hike in dividend payouts for the fourth quarter underscores its robust profitability and consistent shareholder returns, exemplified by over 50 consecutive years of dividend growth. Moreover, with a current annual dividend yield of 2.89%, PepsiCo offers investors a delightful blend of stability and income generation.
In a strategic move, PepsiCo has enhanced its agreement with Celsius Holdings (NASDAQ:CELH), a prominent energy drink producer. The revised terms include an incentive scheme aimed at bolstering Pepsi’s margins on licensed product sales.
All in all, PepsiCo emerges as an attractive avenue for investors seeking reliable growth and a source of steady dividend income, making it a potent choice in the realm of dividend-yielding stocks.
Comcast (CMCSA)
Source: Todd A. Merport / Shutterstock.com
Comcast (NASDAQ:CMCSA) operates at the nexus of media and technology, providing broadband and wireless services to residential and business clients. The conglomerate also holds sway over NBC Universal, the streaming platform Peacock, and several Universal theme parks across the globe.
In the fourth quarter of 2023, Comcast posted a 2% uptick in revenue, a 3% decline in net income, and a remarkable 29% surge in free cash flow compared to the previous year.
With an 11% rise in its share price over the last year, Comcast echoes PepsiCo’s ethos of strong dividend offerings. Boasting six consecutive years of dividend growth, Comcast now proffers an annual yield of 2.95% to its discerning investors.
Benefiting from improved revenue dynamics and a notable upswing in free cash flow, Comcast casts itself as an undervalued prospect in the current market landscape. The surge in free cash flow signals enhanced profitability, a positive omen for investors navigating ahead.
Analog Devices (ADI)
Source: Shutterstock
Analog Devices (NASDAQ:ADI) operates in the semiconductor domain, manufacturing integrated circuits catering to industries like automation, manufacturing, aerospace, and communications.
Unlike its semiconductor peers that witnessed exponential growth, Analog Devices experienced a static share price performance over the last year.
In the first fiscal quarter of 2024, ADI signaled a 23% decline in total revenue and a 51% drop in net income year-on-year, although it surpassed analyst projections on both revenue and earnings per share metrics.
While treading the path of undervalued dividend stocks, ADI recently increased its dividend by 7%, marking 12 consecutive years of dividend growth. Sporting a dividend yield of 1.87%, ADI forecasts revenue to hover around $2.1 billion for the upcoming second quarter of 2024.
Notwithstanding its stagnant share price, Analog Devices boasts a firm dividend yield and has witnessed a 12% jump in its shares over the past six months, signaling a potential resurgence. Bolstered by anticipated earnings growth, ADI appears poised to emerge as a promising bet for discerning investors.
At present, Noah Bolton does not hold any positions (directly or indirectly) in the securities referenced in this article. The opinions expressed here are solely those of the author and are subject to the guidelines of InvestorPlace.com.
