2022 has been a volatile year for the US stock market. Seeking stable income by investing in stocks is a one-way street to high-quality dividend-paying stocks. Fortunately, there are still some good dividend-paying stocks to buy. We are officially entering a bear market and higher interest rates along with high inflation now make dividend stocks a top pick for any portfolio. Why is that?
First, the dividend stocks in this article have strong fundamentals and very attractive valuations. Second, in volatile market conditions, it’s nice to be able to generate passive income in the form of dividends, as they mitigate stock losses and at the same time increase total returns in the event of capital appreciation. Third, the stock market almost always bounces back even when it’s down – it doesn’t move in a straight line up or down. Therefore, I would suggest buying these dividend stocks when they are down. This will make the potential profits better than if you were to buy them on a rally.
Here are seven dividend-paying stocks to buy before the bull market returns:
| Teleprinter | Company | Price |
| STLD | Steel Dynamics, Inc. | $73.81 |
| WLK | Westlake Corporation | $93.45 |
| HUN | Hunter’s Society | $29.08 |
| UFPI | UFP Industries, Inc. | $89.02 |
| Wyoming | Weyerhaeuser Company | $36.13 |
| WRK | WestRock Company | $41.91 |
| OLN | Olin Company | $49.69 |
Dividend stocks to buy: Steel Dynamics (STLD)
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According Yahoo! Finance, steel dynamics (NASDAQ:STLD) is a “steel producer and metal recycler in the United States”. The company’s financial results in the second quarter (Q2) were very strong, with the company posting record five figures.
Record net sales of $6.2 billion, record operating income of $1.6 billion, record operating cash flow of $1 billion and record adjusted EBITDA of $1.7 billion dollars were among those astonishing numbers. At the same time, the company repurchased $517 million in common stock from the company. Additionally, Steel Dynamics reported GAAP earnings per share (or EPS) of $6.44, a beat of $0.72, and revenue of $6.21 billion, a beat of 285, $72 million.
The stock has a forward dividend yield of 1.87% and a one-year valuation target of $85.39 for nearly 22% upside potential. There are many positive factors supporting investment in this steel stock now.
Westlake Corporation (WLK)
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Westlake Corporation (NYSE:WLK) is a specialty chemicals company that manufactures products such as polyethylene used in food packaging and PVC pipes used for drinking water.
The stock has a forward dividend yield of 1.26% and trades at a 12-month price-to-earnings (P/E) ratio of 4.72.
The company has a strong track record beating EPS estimates for the past four consecutive quarters. In Q1 2022, GAAP EPS of $5.83 was a beat of $1.14 and revenue of $4.06 billion was a beat of $600.34 million.
The stock now has a very attractive valuation with a price/earnings/growth ratio (ANKLE) GAAP ratio of 0.01 and a forward price-to-sales (P/S) ratio of 0.72. In 2021, net profit soared 509.42% to $2.01 billion.
The one-year target estimate of $129.87 signals a potential upside of close to 40%.
Dividend stocks to buy: Huntsman Corporation (HUN)
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Hunter’s Society (NYSE:HUN) is a global chemical company comprised of four business divisions, Polyurethanes, Advanced Materials, Performance Products and Textile Effects. These products are used in several markets such as aerospace, automotive and transportation, building and construction, energy and textiles.
The stock has a forward dividend yield of 2.93% and trades at a P/E ratio of 5.39. Additionally, the company has very strong earnings momentum, a catalyst that can drive the stock price higher. A beat in EPS estimates for the past four consecutive quarters is a great reason to consider adding HUN stocks to your portfolio now.
Profitability is robust, with net income jumping 303.47% to $1.05 billion in 2021 and very strong free cash flow growth to $609 million.
With a forward P/S ratio of 0.66, the stock is now a bargain.
UFP Industries (UFPI)
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UFP Industries (NASDAQ:UFPI) is a holding company that operates in three markets, retail, industry and construction. The company reported record financial results in the second quarter of 2022, record net sales of $2.9 billion and “record earnings per diluted share of $3.23, an increase of 16% over the second quarter of 2021. “.
This is the ideal scenario for a stock to go up. The company is seeing consistently strong sales growth and has found an effective way to grow bottom line profits faster than sales.
In 2021, sales growth was 67.56% and net profit increased by 116.07%. The stock has a forward dividend yield of 1.19% and analysts are bullish on that as the one-year estimate target is $102.50, a potential upside of 17%.
Dividend stocks to buy: Weyerhaeuser Company (WY)
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According MarketWatch, Weyerhaeuser Company (NYSE:Wyoming) “is engaged in the manufacture, distribution and sale of forest products. It operates through the following business segments: Timberlands, Real Estate, Energy and Natural Resources (Real Estate & ENR) and Wood Products.
The stock has losses of around 14% in 2022 and offers a forward dividend yield of 2.01%. The P/E ratio of 9.88 is low, but it is not a value trap stock since sales are robust and net profit has increased for the last two consecutive years by 1,148.68 % in 2020 and 227.1% in 2021.
The company has a very strong free cash flow trend with an increase of 117.79% to $2.72 billion in 2021. Consistent free cash flow generation may soon support higher dividends which is very positive.
The one-year price target of $41.30 implies nearly 17% upside potential.
WestRock Company (WRK)
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WestRock Company (NYSE:WRK) has an extensive portfolio of paper and packaging products and provides packaging solutions to companies in the beverage, beauty and personal care, food, e-commerce, retail and food sectors. tobacco, among others.
WRK stock is down nearly 6% year-to-date and now trades at a rather low P/E ratio of 14.03. In addition, they offer a forward dividend yield of 2.4%.
The company’s sales growth is steady and on the rise. In 2021, the return to profitability was made with an impressive growth in net profit of 221.29% to 838.1 million dollars. Additionally, free cash flow growth is phenomenal and accelerated in 2020 and 2021, increasing by 16.1% and 34.03% respectively. EPS momentum is also present and the valuation is just too attractive to ignore now.
The forward price-to-book ratio of 0.88 and the forward P/S ratio of 0.49 are both supportive of a very cheap stock to start accumulating now.
Dividend stocks to buy: Olin Corporation (OLN)
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According Yahoo! Finance, Olin Company (NYSE:OLN) is a chemical manufacturer and distributor operating “through three segments: Chlor Alkali Products and Vinyls; epoxy; and Winchester.
The stock trades at a P/E ratio of 5.49 and offers a forward dividend yield of 1.62%.
Having strong EPS momentum beating estimates for the past three out of four consecutive quarters is the first positive factor regarding OLN stock.
2021 is a turnaround year as the company returned to profitability, recording sales growth of 54.75% and net profit growth of 233.69%.
On the valuation side, things look exceptionally favorable for OLN stocks. The company has a consistently positive free cash flow trend and the stock has a forward P/S ratio of 0.72.
The stock has lost nearly 14% in 2022, but has a one-year target estimate of $71.13, giving it 45% upside potential. This is a cheap dividend stock that is now discounted and offers a good risk-adjusted return for a higher bounce.
As of the date of publication, Stavros Georgiadis, CFA does not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
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