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. RF Industries Ltd. (RFIL - Get Report) presently has an excellent rank, in the top 25% of the coverage universe, which suggests it is among the top most "interesting" ideas that merit further research by investors.But making RF Industries Ltd. an even more interesting and timely stock to look at, is the fact that in trading on Wednesday, shares of RFIL entered into oversold territory, changing hands as low as $5.21 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. In the case of RF Industries Ltd., the RSI reading has hit 29.3 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 54.9. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, RFIL's recent annualized dividend of 0.28/share (currently paid in quarterly installments) works out to an annual yield of 5.16% based upon the recent $5.43 share price. A bullish investor could look at RFIL's 29.3 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 RFIL 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.
More from Stocks
Jim Cramer's 7 Deadly Investing Sins: Sin No. 4 - Arrogance
Don't get blinded by overconfidence in your stock-picking prowess or you could wind up in trouble, Jim Cramer says.
Cadence Design Systems Expected to Earn 51 Cents a Share
Cadence Design Systems revenue expected to rise 8.2% to $576.1 million.
Drug Distributors Fall in After-Hours Trading on Failed Opioid Settlement Talks
Trial set to begin Monday in Cleveland in cases of state and local governments against companies that made and distributed oipiods.