Analysts love these cheap dividend-paying stocks heading into the second half

Published Fri, Jun 28 20242:06 PM EDT

The stock market has had a hot first half, with the S & P 500 up roughly 15%, but there are still opportunities for investors to find cheap names with solid dividends. With the Federal Reserve expected to start cutting interest rates later in the year, bond yields will also move lower, which could make dividend stocks look more attractive. The central bank has signaled it will begin slashing rates sometime this year, although it currently anticipates just one cut in 2024 . Income generated by these dividend payers can help protect investors' portfolios during tumultuous markets. To find dividend stocks that are trading at a discount, CNBC Pro used FactSet data to screen the S & P 500 for names that have buy or overweight ratings from at least 60% of the analysts covering them and that have a forward price-to-earnings ratio of less than the S & P 500's 22.56. They also have upside to the average analyst price target of 10% or more, according to FactSet. In addition, the companies have a dividend yield of at least 2%, higher than the index's yield of 1.27%. Here are the stocks that made the cut. Vici Properties and Host Hotels & Resorts are both real estate investment trusts, yielding 5.9% and 4.5%, respectively. The real estate sector has been beaten down this year. It is the only S & P sector in the red, losing more than 4% year to date. Yet, many on Wall Street see opportunity. Roughly 88% of analysts covering Vici Properties rate it a buy or overweight, and 78% of those covering Host Hotels & Resorts give the stock a buy or overweight rating. Both have roughly 25% upside to the average analyst price target. BMO is one of those bullish on real estate. In May, the firm said it expects a turnaround in the coming months. Host Hotels & Resorts is one of the names it rates outperform. Shares of Host Hotels & Resorts are down more than 8% year to date, while Vici Properties has shed about 11%. Utilities, on the other hand, have run higher this year. The S & P utilities sector is up more than 7% year to date. Sempra , which has a 3.3% dividend yield, still stands out as one utility name trading at a discount. It has a forward P/E of 15.8 and has 10% upside to the average analyst price target. Nearly 77% of analysts covering the stock rate it a buy or overweight. SRE YTD mountain Sempra year to date Sempra is up more than 1% so far this year. Baker Hughes , SLB and ConocoPhillips are the energy names that made the cut. Baker Hughes and SLB both have dividend yields of 2.4%, while ConocoPhillips yields 2%. The S & P 500 energy sector has also done well this year, up more than 9% so far. However, ConocoPhillips is down 1% year to date, while SLB has lost nearly 9% and Baker Hughes is up 3%. Analysts think these names have plenty of room to move higher. SLB has a whopping 41.5% upside to the average price target, while ConocoPhillips has more than 27% upside to the average price target. Baker Hughes has 18% upside to the average target. In May, ConocoPhillips said it struck a deal to buy Marathon Oil in an all-stock transaction worth $17 billion. The move is expected to boost ConocoPhillips' shale assets, adding two billion barrels of resources to its U.S. inventory. COP YTD mountain ConocoPhillips year to date Lastly, toy company Hasbro stands out with its 4.8% dividend yield. About 68% of analysts covering the stock rate it a buy or overweight, and it has nearly 22% upside to the average price target. Among those who like the stock are Bank of America, which upgraded Hasbro earlier this month to buy from neutral. The bank sees an earnings rebound for the company in 2024 and 2025, due in part to its digital gaming strategy.