Investing in beaten-down dividend stocks can help investors benefit from a higher yield and capital gains when market sentiment improves. However, it's essential for investors to avoid picking dividend stocks based solely on their yield. Instead, you need to consider several other factors - including cash flow growth, payout ratio, and balance sheet debt - before adding dividend stocks to your portfolio.
Two quality dividend stocks that currently trade at a discount to Wall Street's consensus price-target estimates are McDonald’s (MCD) and Nike (NKE). Let’s see why it makes sense to buy these two dividend stocks on the dip.
