In an expensive stock market, investors may be hunting for bargains that also pay them to wait for any potential upside. Despite the recent volatility and recent tech sell-off, the broad market remains near all-time highs. In fact, veteran investor Jeremy Grantham told CNBC Friday that “this is the most expensive market in American history.” By buying cheap dividend stocks, investors collect income as they wait for the assets to potentially increase in value. “The case for dividends is as strong as it’s ever been, given the volatility in the markets, given the uncertainty about what the future looks like, and also given the importance of dividend growth as an offset to inflation that’s stickier and higher,” ClearBridge Investments portfolio manager Michael Clarfeld recently told CNBC . Yet not all dividend stocks are created equal. For instance, an elevated dividend can sometimes be a sign of distress at a company. With that in mind, CNBC Pro screened for names in the Vanguard Dividend Appreciation Index Fund ETF that have a dividend yield of 1.5% or more. The stocks are also well-liked by Wall Street: Each has buy ratings from 55% or more of the analysts covering them and price targets that are at least 20% above where the stocks currently trade, according to FactSet. The stocks are also down by at least 5% in the past three months. Abbott Laboratories , with a 2.7% dividend yield, is down nearly 10% in the past three months. The healthcare company has 23% upside to the average price target and 79% of analysts rate it a buy, per FactSet. Matt Powers, founder of Powers Advisory Group, recently told CNBC the stock is heavily oversold . Trivariate Research in May also called out Abbott Labs as a consistent dividend grower that can help provide downside protection for portfolios. ABT YTD mountain Abbott Laboratories year to date The company has been repositioning its portfolio to shift into high-growth areas that have the greatest patient impact, such as cardiovascular, medical technology and wearables, CEO Robert Ford said in an interview with CNBC’s “Squawk Box” earlier this month. “The demand for healthcare is going to continue to accelerate. You’ve got 9 billion people on this planet that are living longer,” he said. “Look at the … prospects of our growth rate, the pipeline that we’re building,” Accenture , with a 5.2% dividend yield, is a global professional services company that’s lost about 35% over the last three months, but it has 40% upside to the average price target. Some 57% of analysts rate it a buy. Earlier this week, Accenture increased its share buyback program by $2 billion to $7.5 billion. The company reported a third-quarter earnings beat last week, but revenue fell short of analyst estimates. The stock sold off after the latest financials. ACN YTD mountain Accenture year to date Accenture CEO Julie Sweet said the company has been hurt by the conflict in the Middle East and is investing for long-term growth. She said there has been “huge progress” in the fundamentals of the business. “The investors, I think, are missing the AI tailwind and how we’re positioning ourselves for the long term,” she said in an interview with CNBC’s “Squawk on the Street.” “We feel very confident about the underlying demand and you see it in the numbers.” Intercontinental Exchange was one of two financials in the screen. The stock has a 1.7% dividend yield, 58% upside to the average price target and a buy rating from 95% of analysts. The owner of the New York Stock Exchange has been under pressure amid speculation about the impact of prediction markets on its business. Last October, ICE took a $2 billion stake in Polymarket. Shares are down about 20% in the last three months. Lastly, Medtronic yields 3.6% and has fallen 8% in the past three months. But the stock has 19% upside to the analysts’ average price target, FactSet numbers show. MDT YTD mountain Medtronic year to date Earlier this month, Medtronic posted a beat on both the top and bottom lines for its fiscal fourth quarter. Its full-year earnings per share guidance, however, fell short of expectations. “We’ve got these big powerful new growth engines, like hypertension and [atrial fibrillation] ablation,” he said. “But the core business is also growing well.” The company recently filed with the Food and Drug Administration to expand its Hugo robotic-assisted surgery system into general and gynecological areas. In addition, the FDA cleared a new pulse oximetry system. Some 64% of analysts covering Medtronic rate it a buy.
