Dividend Stocks for Portfolio Income: 4 Undervalued Shares With Strong Buy Ratings]

In an expensive stock market, investors may be hunting for bargains that also pay them to wait for any potential upside. Despite the recent volatility and tech sell-off, the broad market remains near all-time highs. In fact, veteran investor Jeremy Grantham told CNBC that “this is the most expensive market in American history.” By buying cheap dividend stocks, investors collect income as they wait for potential value appreciation.

The case for dividends is particularly compelling amid market volatility and uncertainty about the future, according to ClearBridge Investments portfolio manager Michael Clarfeld. “Dividend growth is an important offset to inflation that’s stickier and higher.”

Not all dividend stocks offer equal value. CNBC Pro identified names in the Vanguard Dividend Appreciation Index Fund ETF with dividend yields of 1.5% or more, backed by strong Wall Street sentiment—including buy ratings from 55% or more of analysts and price targets at least 20% above current levels.

Here are four compelling dividend payers:

Abbott Laboratories (ABT)

With a 2.7% dividend yield and a nearly 10% decline over three months, Abbott Labs has 23% upside to the average price target. Seventy-nine percent of analysts rate it a buy. The healthcare company is pivoting into high-growth areas like cardiovascular care and medical technology, positioning for long-term demand amid aging global population trends.

Accenture (ACN)

The 5.2% yielding professional services firm has dropped 35% recently but offers 40% upside to the median target. CEO Julie Sweet noted progress in fundamentals despite Middle East headwinds, emphasizing AI tailwinds and long-term positioning.

Intercontinental Exchange (ICE)

This financial firm owns the New York Stock Exchange and carries a 1.7% yield. Despite a 20% drop, it boasts 58% upside potential and a 95% buy rating consensus. Pressure relates to prediction market developments following ICE’s $2 billion Polymarket investment.

Medtronic (MDT)

Paying a 3.6% dividend yield after an 8% decline, Medtronic has 19% upside to analyst targets. The medical device company reported a quarterly beat on both top and bottom lines, with new growth engines in hypertension and atrial fibrillation treatments, plus expanded FDA approvals for its Hugo robotic surgery system.

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