6 Value Stocks With Massive Dividend Growth Potential

By Lee Jackson Published Jan 9, 12:03PM EST

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6 Value Stocks With Massive Dividend Growth Potential — © relif / Getty Images

For years, analysts and portfolio managers have anticipated the return of value stocks as the market has moved higher, and for years, they have continued to underperform growth stocks. However, that appears to be changing in 2024, as almost every metric, from valuations to earnings for the growth arena, has started to roll over some.

Value stocks are typically defined as shares of a company with solid fundamentals priced below its peers, based on price/earnings ratio analysis, yield, and other factors.

We screened our 24/7 equity research database, looking for actual value stocks rated Buy by top Wall Street firms that pay healthy and growing dividends. Six top companies hit our screens, and all make sense now.

Enterprise Products Partners

This company is a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD | EPD Price Prediction) provides various midstream energy services, including:

Gathering, processing, transporting, and storing natural gas
Natural gas liquids (NGL) fractionation
Import and export terminalling
Offshore production platform services

The company has four reportable business segments:

Natural Gas Pipelines and Services,
NGL Pipelines and Services,
Petrochemical Services
Crude Oil Pipelines and Services.

One of the reasons many analysts like the stock might be its distribution coverage ratio. The company’s distribution coverage ratio is well above 1x, making it relatively less risky in the MLP sector.

Enterprise investors are paid a strong 7.49% distribution, which has been increased for the last 24 years.

Equity Residential

This apartment REIT company owns properties in high-growth U.S. cities and pays a very tempting 4.37% dividend. Equity Residential Inc. (NYSE: EQR) is an S&P 500 company focused on acquiring, developing, and managing high-quality apartment properties.

The company is focused on operating in top U.S. growth markets in and around dynamic cities that attract high-quality, long-term renters.

Equity Residential owns or has investments in 305 properties of 80,683 apartment units in:

Boston
New York
Washington, D.C.
Seattle
San Francisco
Southern California
Denver

In addition, the company has been expanding its presence in Denver, Atlanta, Dallas, Fort Worth, and Austin.

Exelon

This top utility stock makes good sense now for conservative accounts and pays a 3.97% dividend. Exelon Corporation (NYSE: EXC) is a utility services holding company that engages in:

Energy generation
Delivery
Marketing businesses in the United States and Canada.

Exelon owns nuclear, fossil, wind, hydroelectric, biomass, and solar facilities.

The company also sells electricity to wholesale and retail customers and sells natural gas, renewable energy, and other energy-related products and services

Additionally, it is involved in purchasing and regulating retail sales of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers

Exelon offers support services, including:

Legal
Human resources
Information technology
Financial
Supply management
Accounting
Engineering
Customer operations
Distribution and transmission planning
Asset management
System operations and power procurement services

It serves distribution utilities, municipalities, cooperatives, financial institutions, and commercial, industrial, governmental, and residential customers.

Morgan Stanley

This is one of Wall Street’s white glove firms and may be among the best buys in the banking and investment arena. It pays a rich 3.65% dividend. Morgan Stanley (NYSE: MS) is a global investment bank with leading positions in:

Investment banking (M&A and equity underwriting)
Equity trading and wealth management, contributing nearly 50% of firmwide revenues

The firm also has an asset management business, which adds to the lower-risk business profile the firm has pursued since the financial crisis.

In late 2020, the company completed a $13 billion purchase of the discount brokerage—E-Trade, with 5.2 million customers. Morgan Stanley ushered in a revolutionary platform that helped start a dramatic shift among financial services firms and fueled the rise of indexes and exchange-traded funds, making investing vastly easier for do-it-yourself investors.

Pfizer

This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a massive 5.70% dividend, which has risen yearly for the last 14 years.

The company offers medicines and vaccines in various therapeutic areas, including:

Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
Sterile injectable and anti-infective medicines, and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands

Pfizer also provides medicines and vaccines in various therapeutic areas, such as:

Pneumococcal disease
Meningococcal disease
Tick-borne encephalitis
COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands.

Verizon Communications

This top telecommunications company currently offers tremendous value and pays a stellar 6.62% dividend. Verizon Communications, Inc. (NYSE: VZ) provides products and services to consumers, businesses, and governmental entities worldwide.

The company operates in two segments:

Verizon Consumer Group
Verizon Business Group

The consumer segment provides

Wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements
Fixed wireless access (FWA) broadband through its wireless networks.

It also offers wireline services in the Mid-Atlantic, Northeastern United States, and Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.

The Business segment provides:

Wireless and wireline communications services and products, including data, video, conferencing
Corporate networking, security
Managed network, local and long-distance voice, network access, various IoT services and products, and FWA broadband through its wireless networks

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.