Chicago Rivet & Machine Becomes Oversold

The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics — strong fundamentals and a valuation that looks inexpensive. Chicago Rivet & Machine Co. (CVR) presently has an above average rank, in the top 50% of the coverage universe, which suggests it is among the top most "interesting" ideas that merit further research by investors.

But making Chicago Rivet & Machine Co. an even more interesting and timely stock to look at, is the fact that in trading on Friday, shares of CVR entered into oversold territory, changing hands as low as $35.115 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

START SLIDESHOW:
Click here to find out what 9 other oversold dividend stocks you need to know about »

In the case of Chicago Rivet & Machine Co., the RSI reading has hit 29.4 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 53.2. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, CVR's recent annualized dividend of 0.72/share (currently paid in quarterly installments) works out to an annual yield of 1.98% based upon the recent $36.4642 share price.

A bullish investor could look at CVR's 29.4 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. Among the fundamental datapoints dividend investors should investigate to decide if they are bullish on CVR is its dividend history. In general, dividends are not always predictable; but, looking at the history chart below can help in judging whether the most recent dividend is likely to continue.

CVR+Dividend+History+Chart

More from Stocks

Global Stocks Rally as US-China Trade War Thaws; Dow Could Test 25,000

Global Stocks Rally as US-China Trade War Thaws; Dow Could Test 25,000

China Trade Truce, General Electric and Tesla - 5 Things You Must Know

China Trade Truce, General Electric and Tesla - 5 Things You Must Know

The Stock Market Has Every Reason to See a Fresh Rally

The Stock Market Has Every Reason to See a Fresh Rally

18 Top Stocks Hedge Funds Own That Goldman Sachs Thinks Will Keep Outperforming

18 Top Stocks Hedge Funds Own That Goldman Sachs Thinks Will Keep Outperforming

3 Simple Tips on Investing From TheStreet's Jim Cramer

3 Simple Tips on Investing From TheStreet's Jim Cramer