Even the most famous dividend stocks can fall out of favor. Sure, the tech industry may be one of the most sought-after industries today, but that does not mean every stock performs well all the time. With cutthroat competition and fast-changing sentiment, share prices can easily fall even when the underlying business remains intact.
For dividend investors, that's worth watching. Lower share prices may offer the chance to buy established tech companies at more attractive valuations while still collecting income along the way.
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With that in mind, I screened the S&P 500 Information Technology sector for dividend-paying stocks trading near oversold levels.
Using Barchart's Stock Screener, I selected the following filters to get my list:
Annual Dividend Yield (%) FWD: Set at 0.1% to filter for companies that pay a dividend. Then, I will sort this column later from highest to lowest.
14-Day Relative Strength Index (RSI): An RSI of 30 is "oversold", and higher than 70 is "overbought". No stocks that meet the other criteria were below 30, so I expanded the cutoff to 40 or lower to identify stocks trading near oversold territory.
Percent From Low: Stocks trading within 5% of their one-month low suggest that shares remain near recent lows, helping confirm that the stock may be approaching oversold territory.
Number of Analysts: 12 or more. The higher the number, the better.
Current Analyst Rating: Stocks rated "Moderate" to "Strong Buy" by Wall Street.
I ran the screen and got six results. I then arranged them from highest to lowest dividend yield, and will now cover the top three.
Microchip Technology is a semiconductor company that designs and manufactures microcontrollers, analog chips, and other embedded-control products used in everything from cars and industrial equipment to consumer electronics. Now, that might not sound as hot as "AI chips," but the sheer range of industries Microchip Tech serves more than makes up for it.
It also has an AI business, though its focus is more on edge AI. That means bringing machine-learning models directly onto microcontrollers and microprocessors, running AI locally while reducing power consumption, latency, and reliance on a cloud connection.
Right now, Microchip stock is trading around 4% off its one-month low, while its RSI sits at 42%. If that sounds good, you might want to consider the company's $1.82 annual dividend, which translates to around a 2.6% yield.
Finally, Wall Street still sees potential in Microchip Technology, with a consensus among 26 analysts rating the stock a "Strong Buy" with as much as 84% upside potential.
Source: Read the original article on finance.yahoo.com
Written by https://futureknowledge.in/
