Nike, Comcast and eight other undervalued dividend stocks, according to Morningstar

Morningstar has named ten undervalued dividend growth stocks - those with a history of steadily increasing payouts to shareholders. Such securities are lagging the market by more than 2 percentage points in 2025 due to a return of investor interest in riskier assets, the agency notes. The list includes companies that have steadily increased dividends over the past five years, while devoting no more than 75% of profits to them, have a competitive advantage and were trading at the largest discount to their fair value as of Sept. 19, 2025, according to Morningstar analysts.

- Albemarle is a lithium producer that has raised its dividend for more than 25 consecutive years. According to Morningstar, low lithium prices remain a risk to the company, but growth is expected by 2026. Albemarle shares are trading 59% below fair value at $200, the agency estimates. The company's value has fallen nearly 7% since the beginning of the year.

- Constellation Brands Brewing Company. The stock has been pressured by weak demand and rising costs in its core beer segment in 2025. Morningstar analysts expect a recovery and high dividend growth. The fair value of Constellation Brands is 41% higher than current quotes, the agency believes. The company's capitalization has declined by more than 40% this year.

- Insurer Elevance Health. Morningstar estimates the company's stock is trading 38% below its fair value of $507. However, analysts warn that its participation in the state's Medicaid medical assistance program and individual insurance plan system creates significant uncertainty in its outlook through 2027. This is due to both the high burden on the system and the risk of new regulatory initiatives. Since the beginning of the year, the company's value has declined by 12.2%.

- Comcast is a cable TV and internet provider. The core cable business provides a competitive advantage and stable cash flow, Morningstar notes. It calculates that the company's securities look attractive, trading 36% below its fair valuation of $49. They have fallen in price by about 16% since the beginning of the year.

- Eastman Chemical Company. It is the stock with the highest dividend yield on the list, Morningstar points out. Analysts say the company's results and outlook have been impacted by lower volumes, unscheduled downtime and a slowing economy due to trade duties. However, strong cash flow is keeping payouts to shareholders on track. Eastman Chemical shares are now worth 36% less than the agency's fair valuation of $100. Since the beginning of the year, the company's capitalization is down nearly 30%.

- Omnicom Advertising Holdings. Morningstar estimates that the pending merger with rival Interpublic Group will create the world's largest agency and bring significant cost and revenue synergies. Management of the combined company is projecting free cash flow of more than $3 billion a year, and analysts believe its allocation to dividends and share repurchases will be increased. Omnicom shares are now trading 35% below Morningstar's fair valuation of $115. They are down 11.3% since the beginning of the year.

- Fortune Brands Innovations, a manufacturer of building materials. This year has been a challenging one for the company, with the bulk of its revenue tied to the weakened U.S. home repair and remodeling market. Nevertheless, analysts expect demand for those services to grow next year, and Fortune Brands will be able to gradually increase its dividend. Its shares now trade 32% below Morningstar's fair valuation. They are down nearly 21% this year.

- Nike is a manufacturer of athletic shoes and apparel. The company has been experiencing declining sales and changed its CEO about a year ago to turn the tide. According to Morningstar analysts, Nike's financial position remains strong and it will continue to return significant cash to shareholders. The company's papers are trading 32% below Morningstar's fair valuation of $104. Since the beginning of the year, quotes have fallen by 6.2%.

- MarketAxess trading platform. According to Morningstar analyst estimates, the company's financial position is strong: high margins and strong cash flows allow it to consistently reward shareholders. Historically, MarketAxess has allocated 30-40% of net income to dividends. Its fair valuation is 31% above current quotes, agency filings show. MarketAxess' value has fallen nearly 21% since the beginning of the year.

- Brown-Forman whiskey maker. It is also among the dividend aristocrats, meaning companies that have been raising payouts to shareholders for 25 years. Morningstar notes strong brands, expects steady dividend growth in parallel with earnings expansion, and special dividends are possible. Brown-Forman shares are worth 31% less than their fair valuation of $40. They're down nearly 29% since the beginning of the year.

This article was AI-translated and verified by a human editor