TWO UNDERVALUED Dividend Stocks to BUY NOW?! 4% Dividend Yield, Special Dividend! Dividend Investing

We are always looking for dividend stocks to buy now, on the road to financial freedom. Always looking to build onto the passive income stream that dividend investing provides. We found two, undervalued dividend growth stocks that could be great for your dividend stock portfolio!

Why do dividends matter? Dividends are one of the best passive income sources. Dividend investing adds to and/or increases your passive income, as you reach financial freedom!

Reference items:

Bank dividend stocks could be, arguably, the one area where you may find undervaluation in this all-time high stock market. The S&P 500 is still over 4,700 in the first month of the year. Despite the potential first interest rate hike to come in the next 2-4 months, the market keeps churning along.

This makes finding undervalued dividend stocks to buy difficult. That's where bank stocks come into play! No, we are not talking about your too big to fail banks, such as JPMorgan Chase, Bank of America, Wells Fargo and Citigroup. I am talking about two, small, regional banks in Ohio and Pennsylvania!

Not only did we put them through the Dividend Diplomat Stock Screener, focused on these 3 metrics:
1.) Price to Earnings Ratio
2.) Dividend Payout Ratio
3.) Dividend Growth Rate

But we also looked at the dividend yield AND the highly important metric to use when evaluating bank stocks to buy - the price to book value.

The two dividend bank stocks are DimeCo. Bank (DIMC) and LCNB (LCNB), two regional banks located in Pennsylvania and Ohio. The total assets on these banks are almost $1B and $2B, respectively. To put this in comparison, JPMorgan (JPM) has a total asset size of over $4 trillion!

DimeCo (DIMC) has a low price to earnings ratio, below 9. In addition, the dividend payout ratio is approximately 33-34%, showing there is room to grow and safety in the dividend. DIMC has grown the dividend for over 5 years and also announced a special dividend of $0.50 back in the last quarter. Therefore, dividend growth is strong and the yield is also almost 4%! Lastly, the price to book value is less than 1x, which is a significant sign of undervaluation.

LCNB (LCNB) is fairly similar, albeit with a higeher P/E ratio of over 12. Their dividend payout ratio is in the sweet spot of just over 50%. They've been growing their dividend for 4 years at an average rate of almost 5%, while yielding OVER 4%! When reviewing the price to book ratio, they are trading slightly over book value, but still shows that this dividend stock is undervalued.

After recapping the two dividend stocks, we think these are two stocks to buy now, despite where the stock market is. Obviously we will state to conduct your own research and we are not professional investors!

Do you see these two banks as stocks to buy right now? Are you going to be buying shares in these two stocks? Seeing any other undervalued opportunities out there? Please let us know and share in the comments.

Thank you everyone! Subscribe, like and let us know your feedback & questions below!

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As always, we recommend conducting your own research to make your own decisions.

[brianh]

will chck these out... agree with BL on bac, also think C is one to watch if not already had bght.

[AverageJoeDividends]

First! FITB (up 55% over 52 week) and JPM (up 20%) are my 2 bank stocks.

[craigrattunde]

I have been doing well with BNS but with a P/B of 1.61 might not be a buy right now?

[marshabonforte]

Very nice. I have room for a regional bank in my Roth.

[shawnoneil]

Since we are talking about financial companies what do you think about the recent dips in TROW? I know you own it but the metrics seem pretty good once again. Wouldn’t be surprised if I see a video come out on this one 😅

[Gman-]

New subscriber! Watched and liked. Thanks for your video breaking down these 2 bank stocks!

[exploredreamdiscover]

Could you do a review on the top 5 diversified banks please? I’d love to see them in a death match based on the results of your stock screener. If you smell what the rock is cookin’

[justacynic]

*This* is a value video. So many going over the same big/bigger cap names. These are tips that might lead to true price appreciation and strong dividend increases. Thank you!

[kevinlue]

Citigroup is .66 price to book from what I can tell. That seems very low to me. Maybe there is more to it.

[AD-cywx]

You guys rock!
Also, 7% pull back in LUMN today just because an insider sold a block. I loaded up.
It’s been paying be 7%+ in dividends for 2 years now. 👍👍👍👍👍

[filb]

You can't go wrong with banks this year that's for sure. I got Citigroup at a good price. 10-15% up already in under a month.

[charleschilds]

Thanks- Some of the regional banks look reasonably priced. I’ll look at these closer. I have asb and onb on my watch list. Keep up the good work!

[roberthall]

Could you please apply the four step diplomat process to BP. I have Been watching this dividend paying stock. Thanks.

[rickgilbert]

I've been buying PEBO for a little while now and I certainly can't complain...p/b below 1 and a 4% yield. LNCB has hit my screener before, but not DIMC...I'll have to look at that one closer.

[simplerick]

I now have 1/75th of $ EViO Float and Holding for analyst rating

[dipaknadkarni]

Great video guys.
I have told many friends but few takers.
You might get to 12 K.
People just do not have the attention span (or are bored) and it will catch up to them.
I am 61 and I did a lot on my own.

[puggzsley]

Regional banks in Iowa are screaming buys. $ATLO, $MOFG, and $HBT

[Colbycrab]

I love it when you guys cover the bank stocks, particularly the smaller regional banks. I'm doing great on my LCNB and HBAN, which I purchased after watching your analysis months back. C still looks really cheap after dipping hard recently. Also curious what your thoughts are on FNB.

[Dan-rsnb]

It's funny, I recommended DIMC to you all. I couldn't get the price to trigger. Here is another one. PFIS - Peoples Financial Services Corp 3% yeild about 4-5% DGR. I am pretty certain book value below 1.

[joshalters]

Not to sound like a DA, but DIMC is trading at $37.50 (at 52wk high) and for some reason MarketBeat is calculating the payout ration to be 93% based on cash flow. You had had 33%, what am I missing?