3 Dividend Stocks to Buy on Sale

Corning, Wells Fargo, and Gilead Sciences pay great dividends -- and all three stocks are bargains.

Keith Speights
Keith Speights
Jun 13, 2017 at 5:43PM
Health Care

Do you like receiving solid quarterly dividends? Do you like to buy a good stock on sale? If you answered "yes" to both questions, here are three stocks that will probably interest you.

Corning (NYSE:GLW), Wells Fargo & Company (NYSE:WFC), and Gilead Sciences (NASDAQ:GILD) check off both boxes. Here's why these are three great dividend stocks to buy on sale now.

"DIVIDENDS" written on page of notebook with money, calculator, and glasses

Image source: Getty Images.


Some bargain stocks are attractively priced because they've been beaten down. That's not the case for Corning. Shares of the specialty-glass company are up nearly 20% so far in 2017 and more than 40% over the last 12 months. Even with these nice gains, Corning stock trades at less than eight times trailing-12-month earnings and less than 16 times expected earnings.

Corning also boasts a solid dividend that currently yields 2.14%. The company increased its dividend by 12.5% earlier this year and announced plans to continue increasing the dividend by at least 10% through 2019. Can Corning pull this off? It seems likely. The company uses only 15% of current earnings to fund its dividend program.

And earnings appear to be headed higher, with solid growth prospects ahead. Corning's optical communications division is growing as fast as the company can manufacture optical fiber. Corning also plans to double sales for its specialty materials business, primarily through new innovations for its Gorilla Glass. 

Wells Fargo & Company

Wells Fargo stock isn't performing nearly as well. The big bank stock started off 2017 nicely, but disappointing first-quarter results were a key factor behind Wells Fargo giving up its earlier gains. Shares now trade at only 12 times expected earnings.

In addition to this attractive valuation, Wells Fargo's dividend continues to be quite appealing also. Its yield currently stands at 2.83%. The company has increased its dividend annually over the past six years. With a payout ratio of 38%, Wells Fargo should be in good shape to keep the dividend hikes coming.

A major scandal that became known last year over its employees creating unauthorized bank accounts for customers gave Wells Fargo a serious black eye. While the company could experience some lingering negative effects from the fiasco, Wells Fargo should remain a good long-term investment.

Gilead Sciences

It's been a rough couple of years for Gilead Sciences. The share price of the big biotech has plunged more than 40% since mid-2015 due to declining sales for its hepatitis C virus (HCV) drugs. As a result, Gilead stock now trades at less than nine times expected earnings.

Despite the big HCV sales drop-off, Gilead continues to enjoy very strong cash flow. That has allowed the company to pay one of the best dividends among biotechs, with a yield of 3.21%. Gilead has increased its dividend by 10% annually since initiating the program in 2015. More increases seem likely, since the company uses only 20% of its earnings to pay out dividends.

The bad news for Gilead is that there's no sign yet that its HCV franchise has stabilized. However, the biotech has a solid HIV lineup that continues to perform well and a strong pipeline with several potential winners. More important, though, is that Gilead has a lot of cash, and the company has stated that it plans to make one or more acquisitions to drive growth.