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Amid an expensive and volatile stock market, investors are seeking cheap dividend payers for income and growth in the second half of 2026. A CNBC Pro screen identified four key stocks: Abbott Laboratories, Accenture, Intercontinental Exchange, and Medtronic. These companies offer robust dividend yields, strong analyst buy ratings, significant price target upside, and have recently experienced stock declines, presenting compelling opportunities.
In today's elevated stock market, investors are actively seeking attractive bargains that offer both potential upside and a steady stream of income. Despite recent market volatility and a tech sector sell-off, the broader market indices remain near all-time highs, prompting veteran investor Jeremy Grantham to label it "the most expensive market in American history." Investing in undervalued dividend stocks presents a compelling strategy, allowing shareholders to collect income while awaiting potential capital appreciation. Michael Clarfeld, a portfolio manager at ClearBridge Investments, emphasized the enduring strength of dividends, noting their importance in mitigating inflation and navigating uncertain market conditions.
However, not all dividend stocks are created equal; a high yield can sometimes signal underlying company distress. To identify robust opportunities, a recent CNBC Pro analysis screened for companies within the Vanguard Dividend Appreciation Index Fund ETF. The criteria included a dividend yield of 1.5% or higher, strong Wall Street sentiment with at least 55% buy ratings from covering analysts, price targets indicating at least 20% upside from current trading levels, and a stock price decline of at least 5% over the past three months. This rigorous selection process highlighted four promising companies:
Abbott Laboratories (ABT)
Abbott Laboratories, a healthcare giant, currently offers a 2.7% dividend yield and has seen its shares drop nearly 10% in the last three months. Analysts see significant value, with a 23% upside to the average price target and 79% rating it a buy, according to FactSet. Matt Powers of Powers Advisory Group recently commented that ABT is heavily oversold. Trivariate Research also identified Abbott Labs in May as a consistent dividend grower capable of providing portfolio downside protection. CEO Robert Ford noted in a CNBC interview that the company is strategically repositioning its portfolio into high-growth areas like cardiovascular, medical technology, and wearables to meet accelerating global healthcare demand driven by an aging and growing population.
Accenture (ACN)
Accenture, a global professional services powerhouse, boasts an impressive 5.2% dividend yield, despite a substantial 35% decline in its stock over the past three months. Analysts remain optimistic, with 57% rating it a buy and an average price target implying 40% upside. The company recently expanded its share buyback program by $2 billion to $7.5 billion. Although Accenture reported a Q3 earnings beat last week, revenue fell short of estimates, contributing to the stock's recent sell-off. CEO Julie Sweet acknowledged the impact of global conflicts, particularly in the Middle East, but highlighted the company's strong underlying business fundamentals and long-term investments in AI, asserting that investors might be overlooking the significant AI tailwind.
Intercontinental Exchange (ICE)
Intercontinental Exchange, owner of the New York Stock Exchange and other global exchanges, stands out with a 1.7% dividend yield. It garners exceptional analyst support, with 95% buy ratings and an average price target suggesting a remarkable 58% upside. ICE has faced market pressure amid speculation regarding the impact of prediction markets on its core business, having taken a $2 billion stake in Polymarket last October. Despite these concerns, its shares are down approximately 20% in the last three months, presenting a potential entry point.
Medtronic (MDT)
Medtronic, a leading medical technology company, offers a 3.6% dividend yield and has experienced an 8% stock decline over the past three months. FactSet data shows a 19% upside to analysts' average price target, with 64% of analysts recommending a buy. Earlier this month, Medtronic exceeded both top and bottom-line estimates for its fiscal fourth quarter, though its full-year EPS guidance fell short of expectations. The company is emphasizing new growth engines in areas like hypertension and atrial fibrillation ablation, alongside solid performance in its core business. Medtronic recently filed with the FDA to expand its Hugo robotic-assisted surgery system and received clearance for a new pulse oximetry system, signaling future growth drivers.
