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. Daktronics Inc. (DAKT - Get Report) 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 Daktronics Inc. an even more interesting and timely stock to look at, is the fact that in trading on Tuesday, shares of DAKT entered into oversold territory, changing hands as low as $9.53 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 Daktronics Inc., the RSI reading has hit 22.1 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 34.4. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, DAKT's recent annualized dividend of 0.40/share (currently paid in quarterly installments) works out to an annual yield of 3.62% based upon the recent $11.05 share price. A bullish investor could look at DAKT's 22.1 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 DAKT 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
Stocks Mixed on Renewed Doubts About U.S.-China Trade Negotiations
Stocks are mixed Thursday following reports of a snag in U.S.-China trade talks.
Kraft Heinz Shares Slide After Goldman Downgrade Cautions on Earnings Weakness
Kraft Heinz shares traded lower Thursday after analysts at Goldman Sachs lowered their rating on the packaged food group and cautioned that the beaten-down stock has "not found a floor" in terms of earnings weakness.
HP Inc. Says It's Aware of Icahn Stake, Is Committed to All Holders' Interests
The New York activist told the Wall Street Journal that a combination, proposed last week by Xerox, would yield cost savings, a more balanced product line, and ultimately profits for holders.
Viacom Posts Fourth-Quarter Earnings Beat as Paramount Regains Luster
Viacom posts fourth-quarter earnings that beat analysts' forecasts as it continues to make inroads in capitalizing off its programming, and as its fabled but previously floundering Paramount unit regains its luster.