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Get’em While They’re Hot: 3 Previously Oversold Dividend Kings

Written By: Rick Orford
Reviewed by: Mike Reyes
Last Updated July 3, 2023
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  • Take advantage of these Previously Oversold Dividend Kings prices while they’re cheap.
  • SJW Corp (SJW): Utility company that offers consistently increasing dividend income.
  • Black Hills Corp (BKH): Currently trading at a strong support level and offering a low-risk entry.
  • AbbVie (ABBV): Offers a very attractive yield of 4.39%.

2022 was one of the most challenging periods for investors in the stock market, from persistent inflation to consecutive interest rate hikes that lasted till this year. These ongoing macroeconomic issues created a lot of difficulties for most investors. Throughout the year, investors remained skeptical about the prospects of improvement as analysts continued to predict an economic recession. 

However, the first half of 2023 has started to display signs of improvement – which is starting to influence the market sentiment. Even though it may take more time to return to pre-pandemic levels, there are still opportunities that come along. Just earlier this month, the S&P500 entered bullish territory, which has raised the sentiment of the market in terms of recovery.

Dividend Kings and Oversold Conditions?

This change in sentiment has opened opportunities to pick up elite dividend stocks that have an established history and stood the test of time. These are the “Dividend Kings” – stocks that have increased their dividends for at least the last 50 consecutive years. This is a very rare group ofcompanies. And, with their ability to provide income and growth, it’s no wonder they hold a spot in many investors’ portfolios. 

Now, if a stock trading at attractive levels thanks to its  “oversold” conditions, investors may be up for an even better bargain. Oversold levels are determined using RSI, a momentum indicator that measures the magnitude and speed of a security’s price changes plotting from 0 to 100. This helps identify oversold (30 and below) or overbought (70 and above) conditions in the price of that security. 

With that said, let’s look at some previously oversold dividend kings that are trading at attractive.

AbbVie Inc. (ABBV)

AbbVie Inc. (NYSE:ABBV) is a biopharmaceutical company that offers immunology, oncology, neuroscience, eye care and aesthetics products that are being sold to wholesalers, distributors, government agencies, independent retailers and company-owned distribution centers and warehouses.

The company has just registered a 52-week low of $130.90 after emerging from its oversold reading from its 14-day RSI at the start of the month. As a result, there are  signs of a potential double bottom after closing positive from its previous day’s indecision candle. This offers investors to buy into ABBV cheaply and with a stable income through its dividends.

As for dividend income, the company has a 4.39% dividend yield which is the highest on this list. ABBV has a 5-year dividend growth rate of 120.31% and a payout ratio of 62.55% and has been providing investors a stable and increasing for the last 51 years of consecutive dividend increase.

SJW Group (SJW)

SJW Group (NYSE:SJW) is a holdings company that offers water utilities and related services that are operated through its subsidiaries and real estate services focused on property management and investment activities conducted through its subsidiary SJW Land Company and Chester Realty Inc.

The company has been in a downward trend since its last high at $83.38. But, its 14-day RSI just recently flashed an oversold reading. traders took advantage of this as its immediate support area is around $68.17. This tells us that it might be the area that buyers have been waiting for. With a bit more follow-through, we may have just seen the short-term bottom for SJW.

In terms of passive income, the company offers a 2.16% dividend yield with a payout ratio of 54.30% and a 5-year dividend growth rate of 38.46%. The company has consistently increased its dividends for 56 years, cementing its place as a  dividend kings..

Black Hills Corporation (BKH)

Black Hills Corporation (NYSE:BKH) is a utility company involved in generating, transmitting and distributing electricity to its customers in Colorado, Montana, South Dakota and Wyoming through its electric utility segments. It owns and operates gas transmission pipelines for distribution to its customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming.

The company is currently trading in a tight range since early February, between $58.81-$66.85. Just before the start of June, BKH flased  an oversold reading in its 14-day RSI buyers stepped in for a quick bounce. It’s now trading near its range support which is offering investors a chance for an even more attractive point of entry.

As for dividends, the company has a 4.15% dividend yield, a 5-year dividend growth rate of 33.15% and a payout ratio of 62.55%. The company has been offering investors a stable income with its 52 years of consecutive dividend increases.

Final Thoughts

Buying stocks that were previously oversold can be a good way of spotting stocks that have hit their bottom. However, investors should remember that oversold securities can still sell offeven further. As a result, it’s always best to wait for a buying signal and confirmation to lower the risk of the trade, as the market can always prove everyone wrong.

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