3 high-quality dividend growers to buy on the dip

Core Insights - Old Dominion Freight Lines, Avery Dennison, and Lennox International are identified as stocks on the verge of correction despite solid Q4 results and healthy outlooks [2][3][5][7] - Dividend growth stocks are attractive but often come with higher valuations and lower yields, making timing important for investment [2] Group 1: Old Dominion Freight Lines - Old Dominion Freight Lines has increased its dividend by 30%, reflecting a robust outlook for distribution growth [3] - The stock has a yield of approximately 0.53% with a high price multiple of 30X earnings, and the payout is only 16% of earnings [3] - Analysts have upgraded the stock's rating to Hold, with a price target increase of 35% compared to last year, indicating potential upside [3] Group 2: Avery Dennison - Avery Dennison offers a higher yield of 1.6% and trades at a more reasonable 21X earnings, with a double-digit growth rate in distributions [5] - The company is expected to achieve an 18% gain this year and a 15% increase next year, with analysts rating it a Moderate Buy [5] - Following Q4 results, JPMorgan raised its price target to align with the consensus of $218, indicating a potential 10% increase [5] Group 3: Lennox International - Lennox International is experiencing a price correction, which may enhance its value and yield, with a payout of less than 25% of earnings [7] - The stock has shown consistent earnings growth in the low-double digits and maintains a 12% compound annual growth rate (CAGR) for distributions [7] - Analysts suggest that the stock is positioned for improvement despite current market conditions [7] Group 4: Analyst Sentiment - Analysts' activity post-Q4 results is mixed but generally bullish, with revisions including a downgrade, a boosted price target, and an initiated Buy rating [8] - The consensus assumes a 5% market upside, with the high-end price target indicating a potential 23% increase [8]