As the painful first half of 2022 ends, many income investors are hoping for some sort of relief. Many dividend stocks have seen their yields creep subtly higher in recent months as their share prices slowly trended lower.
For income investors, the current environment has been quite hostile to dip-buyers.
We’ve suffered quite a few short-lived bear market bounces this year. Many more are sure to follow.
Though the likelihood of a V-shaped recovery is diminishing with every swift move lower, there are still plenty of oversold stocks out there overdue for a relief bounce.
In this piece, we’ll use the TipRanks Comparison Tool to evaluate three dividend stocks that Wall Street still views as “Strong Buys.”
Broadcom stock is a designer and developer of semis and associated software. The chip stock plunge has been brutal to the $195 billion firm, which is now off 27% year-to-date.
The company recently agreed to acquire virtualization software company VMWare, in a deal worth $61 billion. Such a deal bolsters Broadcom’s software presence, and given the timing of the deal (after a sizable decline in tech stocks), there’s a good chance that Broadcom walked away with a bargain. Add potential synergies into the equation, and the VMWare deal is one that should be applauded by investors.
Despite Broadcom’s diversification into software via M&A, the company is still subject to the ups and downs of the semi space. Though chip demand remains incredibly robust to date, there’s no telling what a severe recession could entail for the chip maker.
On the one hand, networking chip demand seems to be on the uptrend, thanks partly to the resilience of the enterprise, who’s still more than willing to invest in the digital transformation trend. On the other hand, it’s difficult to gauge where demand will be at year-end if further evidence of an economic slowdown materializes.
If demand diminishes rapidly, any supply-chain ramp-up in response to the semi shortage could lead to discounting down the road. Over many quarters, chip demand has been high, but supply is constrained. Once…