Buy Low, Sell High. 2 Buy Rated Dividend Stocks Near Their Long Term Support

Rick Orford - Barchart - Fri Mar 10, 2023

Investing in the stock market can be a lucrative way to build wealth, but it can also be a daunting task for novice investors. One strategy that helps investors in their stock-picking process is looking at buy-rated stocks from reputable analysts and buying them near their long-term support levels. One common method for identifying long-term support is the 200-period moving average.

The 200-period moving average is a commonly used technical indicator that shows the average price of a stock over the past 200 trading days. When a stock is trading near this moving average, it can signal that the stock is in a strong uptrend and could be a good buy opportunity.

Here are 3 buy-rated stocks that are close to their 200-day moving average.

Federal Realty Investment Trust (FRT)

Federal Realty Investment Trust is a real estate investment trust (REIT) and is one of the oldest REITs in the U.S. The company was founded in 1962 by Samuel J. Gorlitz. Currently, the company is headquartered in Rockville, Maryland, U.S. Additionally, the company had about 322 employees in 2021.

FRT provides leasable properties in Arizona, California, Connecticut, Florida, and Illinois. The company offers three kinds of properties:

The company now has about 2.2 million square feet of office space and is planning to acquire more.
The company's residential spaces are meant to complement its commercial settings, resulting in integrated, engaging communities where living, work and play seamlessly intersect.
With the help ofFRT's specialty leasing spaces, clients have the freedom to experiment with new concepts, develop original brand experiences, introduce new products, and more.

Federal Realty Investment Trust has an annual dividend yield of 4.12% and a 5-year dividend growth rate of 8.59%. FRT is expected to pay its 1st interim dividend for the year of $1.08. FRT has continuously increased its dividends for 55 straight years and as such, is a part of the elite Dividend Kings.

Analyst Rating

Analysts rate Federal Realty Investment Trust a “Moderate Buy” rating based on 6 Strong Buys and 7 Holds from analysts. FRT’s mean target price is $117.92 with a high target of $131.00 an upside of 27.92% based on its last trading price.

Is it a Buy?

The chart shows that FRT is currently testing its 200-day moving average support and closed below it. It initially broke above its long-term moving average last November but did not hold and broke down again. It broke above the second time in early January and has been consolidating above the 200-day moving average. The next thing investors should do is wait and see how prices will behave around the 200-day moving average and wait for a signal to buy.

H.B. Fuller Company (FUL)

H.B. Fuller Company is a global formulator, manufacturer, and marketer of adhesives, sealants, and other specialty chemical products.

The company offers products in these segments:

Hygiene / Health and Consumable Adhesive – Provides adhesive products to health and beauty, packaging, and assembly markets.

Engineering Adhesives and Construction Adhesives – Provides adhesives to transportation, electronics, aerospace, etc.

Based on H.B. Fuller’s latest trading price, their annual dividend yield is 1.09%. Dividend growth inventors will apprecite the company has a trailing 5-year dividend growth rate of 25.42%. Indeed, the company has increased its dividends for 53 straight years and as such, is a part of the elite Dividend Kings.

FUL is expected to announce its 2nd interim dividend for the year between the 1st and 2nd week of April.

Analyst Rating

Analysts rate H.B. Fuller Company a “Moderate Buy” rating based on 5 Strong Buys and 1 Strong Sell from analysts. FUL’s mean target price is $84.00 with a high target of $106.00 an upside of 55.04% based on its last trading price.

Is it a Buy?

The chart shows that FUL is currently hovering near its 200-day moving average. Price has been trading within the range of 57.36 and 81.73 since December last year and is currently in the middle of the range. However, prices have tested the support twice in the last week of January and the last week of February and is currently a few cents near it. The next question investors should ask is, will another bounce happen, or should you front-run it now?

Ecolab Inc (ECL)

Ecolab, Inc. is a company that provides services and technological systems for water treatment, cleansing, cleaning, and hygiene to over 3 million customers. It was founded in 1923 and today, the company is headquartered in Saint Paul, Minnesota, U.S. Also, it has over 47,000 employees.

Currently, ECL operates in more than 170 countries. The company’s operations are divided into 11 divisions:

Ecolab, Inc. has an annual dividend yield of 1.33% and a 5-year dividend growth rate of 35.53%. ECL is expected to pay its 2nd interim dividend for the fiscal year on April 17, 2023, with an Ex-date of March 20, 2023, and a record date of March 21, 2023. ECL has continuously increased its dividends for 31 straight years and as such, is a part of the elite Dividend Aristocrats.

Analyst Rating

Analysts rate Ecolab, Inc a “Moderate Buy” rating based on 10 Strong Buys and 10 Holds from analysts. ECL’s mean target price is $171.65 with a high target of $210.00 an upside of 33.21% based on its last trading price.

Is it a buy?

The chart shows that ECL has been in a downtrend after reaching its last year's high price of $237.38 last January 5, 2022. Prices reached a bottom of $131.04 last November 3, 2022, and broke above its 200-day simple moving average on February 14, 2023. Prices are consolidating above the moving average and are giving investors time to assess for any signs of follow-through or this is just another fake out.

Final Thoughts

Investing in stocks that are trading close to their support levels can be a great way to add stability to your investment portfolio. Evaluating how stocks behave on these levels will help investors get the best risk-to-reward ratio from their investments. However, just because a stock is near a support level doesn’t make it a “must buy”. Investors should always assess the fundamentals before making an investment decision.

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On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.