10 Best Undervalued Dividend Stocks At 52w High for February 2026
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Market Overview & Selection Criteria
In the current market environment, value investors seek stocks trading significantly below their intrinsic value, as calculated by ValueSense's machine learning-driven models. These top stock picks were selected using ValueSense's proprietary methodology, focusing on companies with high Quality ratings, strong ROIC, robust Free Cash Flow, and substantial upside based on intrinsic value estimates. Criteria include market caps over $90B, impressive 1Y returns demonstrating momentum, and favorable margins despite varying revenue growth. Sectors span technology, energy, mining, defense, and banking, providing diversification. This stock watchlist highlights undervalued opportunities in commodities and tech, ideal for long-term investment ideas in best value stocks.
Featured Stock Analysis
Stock #1: Micron Technology, Inc. (MU)
| Metric | Value |
|---|---|
| Market Cap | $486.8B |
| Quality Rating | 8.2 |
| Intrinsic Value | $419.0 |
| 1Y Return | 348.5% |
| Revenue | $42.3B |
| Free Cash Flow | $17.3B |
| Revenue Growth | 45.4% |
| FCF margin | 40.9% |
| Gross margin | 45.3% |
| ROIC | 23.4% |
| Total Debt to Equity | 21.2% |
Investment Thesis
Micron Technology, Inc. (MU) stands out as a top performer in the technology sector with a stellar Quality rating of 8.2, the highest in this watchlist. Its intrinsic value of $419.0 suggests massive upside potential for value investors. With a Market Cap of $486.8B, Revenue of $42.3B, and explosive Revenue growth of 45.4%, MU demonstrates robust demand in memory and storage solutions. The Free Cash Flow of $17.3B yields an exceptional FCF margin of 40.9%, complemented by a Gross margin of 45.3% and ROIC of 23.4%. Low Total Debt to Equity at 21.2% underscores financial strength, while a 1Y Return of 348.5% highlights its growth trajectory. This positions MU as a prime undervalued growth stock in semiconductors.
Key Catalysts
- Surging revenue growth at 45.4%, driven by AI and data center demand
- Industry-leading FCF margin of 40.9% supporting reinvestment and shareholder returns
- High ROIC of 23.4% indicating efficient capital allocation
- Top Quality rating of 8.2 signaling superior fundamentals
Risk Factors
- High market cap exposure to tech sector volatility
- Potential cyclicality in semiconductor demand
- Dependence on global supply chains
Stock #2: HSBC Holdings plc (HSBC)
| Metric | Value |
|---|---|
| Market Cap | $304.0B |
| Quality Rating | 5.1 |
| Intrinsic Value | $92.3 |
| 1Y Return | 76.3% |
| Revenue | $116.3B |
| Free Cash Flow | $0.0 |
| Revenue Growth | (44.8%) |
| FCF margin | 0.0% |
| Gross margin | 57.4% |
| ROIC | 166.8% |
| Total Debt to Equity | 49.4% |
Investment Thesis
HSBC Holdings plc (HSBC), a global banking giant, offers value in the financial sector with a Market Cap of $304.0B and Quality rating of 5.1. Its intrinsic value of $92.3 points to undervaluation, backed by a strong 1Y Return of 76.3%. Despite Revenue growth of 44.8% and Free Cash Flow at $0.0 with 0.0% FCF margin, the Gross margin of 57.4% and extraordinary ROIC of 166.8% reflect efficient operations. Total Debt to Equity at 49.4% is manageable for a bank. This analysis reveals HSBC as a best value stock for those eyeing international banking exposure amid shifting global rates.
Key Catalysts
- Exceptional ROIC of 166.8% from core banking efficiency
- Solid gross margin of 57.4% supporting profitability
- Strong 1Y return of 76.3% indicating market recognition
- Diversified global revenue streams
Risk Factors
- Negative revenue growth of 44.8% signaling headwinds
- Zero FCF and FCF margin posing cash flow concerns
- Exposure to geopolitical and regulatory risks in banking
Stock #3: Shell plc (SHEL)
| Metric | Value |
|---|---|
| Market Cap | $224.2B |
| Quality Rating | 5.7 |
| Intrinsic Value | $108.0 |
| 1Y Return | 16.8% |
| Revenue | $268.7B |
| Free Cash Flow | $25.9B |
| Revenue Growth | (9.5%) |
| FCF margin | 9.7% |
| Gross margin | 18.8% |
| ROIC | 10.9% |
| Total Debt to Equity | 41.6% |
Investment Thesis
Shell plc (SHEL) in the energy sector boasts a Market Cap of $224.2B and Quality rating of 5.7. The intrinsic value of $108.0 indicates undervaluation, with Revenue of $268.7B and Free Cash Flow of $25.9B yielding a 9.7% FCF margin. Despite Revenue growth of 9.5%, Gross margin at 18.8% and ROIC of 10.9% show resilience, with Total Debt to Equity at 41.6%. A 1Y Return of 16.8% adds stability. This makes SHEL a key energy stock pick for commodity-focused portfolios.
Key Catalysts
- Strong FCF of $25.9B with healthy 9.7% margin
- Stable ROIC of 10.9% in volatile energy markets
- Large-scale revenue base of $268.7B
- Transition potential in energy diversification
Risk Factors
- Declining revenue growth of 9.5% tied to oil prices
- Commodity price fluctuations
- Energy transition regulatory pressures
Stock #4: TotalEnergies SE (TTE)
| Metric | Value |
|---|---|
| Market Cap | $159.9B |
| Quality Rating | 5.5 |
| Intrinsic Value | $94.7 |
| 1Y Return | 23.3% |
| Revenue | $183.9B |
| Free Cash Flow | $12.9B |
| Revenue Growth | (9.5%) |
| FCF margin | 7.0% |
| Gross margin | 16.7% |
| ROIC | 9.7% |
| Total Debt to Equity | 53.9% |
Investment Thesis
TotalEnergies SE (TTE), another energy leader, has a Market Cap of $159.9B and Quality rating of 5.5. Intrinsic value at $94.7 suggests upside, supported by Revenue of $183.9B, Free Cash Flow of $12.9B (7.0% FCF margin), and 1Y Return of 23.3%. Revenue growth of 9.5% is offset by Gross margin of 16.7% and ROIC of 9.7%, with Total Debt to Equity at 53.9%. Ideal for undervalued energy stocks.
Key Catalysts
- Reliable FCF generation at $12.9B
- Consistent ROIC of 9.7%
- 23.3% 1Y return momentum
- Balanced energy portfolio
Risk Factors
- Negative revenue growth mirroring sector trends
- Higher debt levels at 53.9%
- Oil and gas price dependency
Stock #5: Rio Tinto Group (RIO)
| Metric | Value |
|---|---|
| Market Cap | $149.2B |
| Quality Rating | 6.0 |
| Intrinsic Value | $120.4 |
| 1Y Return | 54.8% |
| Revenue | $107.9B |
| Free Cash Flow | $12.7B |
| Revenue Growth | (5.5%) |
| FCF margin | 11.8% |
| Gross margin | 27.7% |
| ROIC | 26.6% |
| Total Debt to Equity | 38.1% |
Investment Thesis
Rio Tinto Group (RIO) in mining features a Market Cap of $149.2B and Quality rating of 6.0. Intrinsic value of $120.4 highlights value, with Revenue of $107.9B, Free Cash Flow $12.7B (11.8% FCF margin), and 1Y Return 54.8%. Revenue growth 5.5% pairs with Gross margin 27.7% and top-tier ROIC 26.6%; Total Debt to Equity 38.1%. A standout in commodities stock picks.
Key Catalysts
- High ROIC of 26.6% from mining efficiency
- Attractive 11.8% FCF margin
- 54.8% 1Y return strength
- Strong gross margins at 27.7%
Risk Factors
- Mild revenue decline of 5.5%
- Commodity cycle risks
- Geopolitical mining exposures
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Stock #6: Lockheed Martin Corporation (LMT)
| Metric | Value |
|---|---|
| Market Cap | $145.2B |
| Quality Rating | 6.1 |
| Intrinsic Value | $842.7 |
| 1Y Return | 39.0% |
| Revenue | $75.1B |
| Free Cash Flow | $6,908.0M |
| Revenue Growth | 5.7% |
| FCF margin | 9.2% |
| Gross margin | 10.2% |
| ROIC | 26.5% |
| Total Debt to Equity | 322.9% |
Investment Thesis
Lockheed Martin Corporation (LMT) in defense has Market Cap $145.2B and Quality rating 6.1. Intrinsic value $842.7 signals deep value, with Revenue $75.1B, Free Cash Flow $6,908.0M (9.2% FCF margin), and 1Y Return 39.0%. Positive Revenue growth 5.7%, ROIC 26.5%, but high Total Debt to Equity 322.9%. Key for defense stock ideas.
Key Catalysts
- Elevated ROIC 26.5% from government contracts
- Steady revenue growth 5.7%
- 39.0% 1Y performance
- Solid FCF margin 9.2%
Risk Factors
- Very high debt-to-equity at 322.9%
- Budget-dependent revenues
- Geopolitical contract uncertainties
Stock #7: Petróleo Brasileiro S.A. - Petrobras (PBR)
| Metric | Value |
|---|---|
| Market Cap | $99.6B |
| Quality Rating | 6.1 |
| Intrinsic Value | $32.9 |
| 1Y Return | 8.6% |
| Revenue | $86.4B |
| Free Cash Flow | $15.9B |
| Revenue Growth | (11.6%) |
| FCF margin | 18.4% |
| Gross margin | 48.1% |
| ROIC | 8.8% |
| Total Debt to Equity | 88.5% |
Investment Thesis
Petróleo Brasileiro S.A. - Petrobras (PBR) offers energy exposure with Market Cap $99.6B and Quality rating 6.1. Intrinsic value $32.9, Revenue $86.4B, Free Cash Flow $15.9B (18.4% FCF margin), 1Y Return 8.6%. Revenue growth 11.6%, strong Gross margin 48.1%, ROIC 8.8%, Total Debt to Equity 88.5%. Compelling value stock in oil.
Key Catalysts
- High FCF margin 18.4%
- Robust gross margin 48.1%
- Quality rating 6.1
- Cash flow strength $15.9B
Risk Factors
- Revenue contraction 11.6%
- Elevated debt 88.5%
- Brazil-specific political risks
Stock #8: Northrop Grumman Corporation (NOC)
| Metric | Value |
|---|---|
| Market Cap | $97.8B |
| Quality Rating | 5.7 |
| Intrinsic Value | $841.8 |
| 1Y Return | 43.9% |
| Revenue | $42.0B |
| Free Cash Flow | $3,307.0M |
| Revenue Growth | 2.2% |
| FCF margin | 7.9% |
| Gross margin | 19.8% |
| ROIC | 8.4% |
| Total Debt to Equity | 118.4% |
Investment Thesis
Northrop Grumman Corporation (NOC) in defense shows Market Cap $97.8B, Quality rating 5.7, Intrinsic value $841.8. Revenue $42.0B, Free Cash Flow $3,307.0M (7.9% FCF margin), 1Y Return 43.9%. Revenue growth 2.2%, Gross margin 19.8%, ROIC 8.4%, Total Debt to Equity 118.4%. Defensive investment opportunity.
Key Catalysts
- Strong 43.9% 1Y return
- Reliable FCF 7.9% margin
- Steady revenue growth
- Defense sector stability
Risk Factors
- Higher debt levels 118.4%
- Slower growth profile
- Contract renewal risks
Stock #9: The Bank of Nova Scotia (BNS)
| Metric | Value |
|---|---|
| Market Cap | $93.5B |
| Quality Rating | 5.5 |
| Intrinsic Value | $75.8 |
| 1Y Return | 50.3% |
| Revenue | CA$73.2B |
| Free Cash Flow | CA$5,060.0M |
| Revenue Growth | 12.4% |
| FCF margin | 6.9% |
| Gross margin | 44.3% |
| ROIC | 39.9% |
| Total Debt to Equity | 569.0% |
Investment Thesis
The Bank of Nova Scotia (BNS) in banking has Market Cap $93.5B, Quality rating 5.5, Intrinsic value $75.8. Revenue CA$73.2B, Free Cash Flow CA$5,060.0M (6.9% FCF margin), 1Y Return 50.3%. Positive Revenue growth 12.4%, Gross margin 44.3%, high ROIC 39.9%, Total Debt to Equity 569.0%. Attractive for bank stock picks.
Key Catalysts
- Revenue growth 12.4%
- High ROIC 39.9%
- 50.3% 1Y return
- Solid margins
Risk Factors
- Extreme debt-to-equity 569.0%
- Currency fluctuations (CAD)
- Interest rate sensitivity
Stock #10: Petróleo Brasileiro S.A. - Petrobras (PBR-A)
| Metric | Value |
|---|---|
| Market Cap | $93.2B |
| Quality Rating | 6.1 |
| Intrinsic Value | $32.8 |
| 1Y Return | 15.1% |
| Revenue | $86.4B |
| Free Cash Flow | $16.7B |
| Revenue Growth | (11.6%) |
| FCF margin | 19.4% |
| Gross margin | 48.1% |
| ROIC | 8.8% |
| Total Debt to Equity | 88.5% |
Investment Thesis
Petróleo Brasileiro S.A. - Petrobras (PBR-A) mirrors PBR with Market Cap $93.2B, Quality rating 6.1, Intrinsic value $32.8. Revenue $86.4B, Free Cash Flow $16.7B (19.4% FCF margin), 1Y Return 15.1%. Revenue growth 11.6%, Gross margin 48.1%, ROIC 8.8%, Total Debt to Equity 88.5%. Variant for energy diversification.
Key Catalysts
- Superior FCF margin 19.4%
- High gross margin 48.1%
- Consistent quality 6.1
- Improved FCF vs. PBR
Risk Factors
- Revenue decline 11.6%
- Political and debt risks
- Similar to PBR exposures
Portfolio Diversification Insights
This stock watchlist balances sectors: technology (MU), banking (HSBC, BNS), energy (SHEL, TTE, PBR, PBR-A), mining (RIO), and defense (LMT, NOC). Energy dominates at ~40% allocation, providing commodity stability, while tech (MU) adds growth. Defense offers defensiveness, banking yield potential. Pairing high-ROIC names like MU and RIO with FCF-strong energy reduces correlation risks. Overall, sector allocation enhances resilience against tech volatility or oil swings, ideal for diversified investment opportunities.
Market Timing & Entry Strategies
Consider entry on pullbacks to 80-90% of intrinsic value, monitoring macroeconomic factors like interest rates and commodity prices. For growth like MU, watch AI demand; for energy (SHEL, TTE), track oil above $70/barrel. Defense (LMT, NOC) suits steady accumulation. Use ValueSense screeners for real-time signals, averaging in over 3-6 months to mitigate timing risks in this undervalued stocks collection.
Explore More Investment Opportunities
For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:
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FAQ Section
How were these stocks selected?
These top 10 stock picks were curated via ValueSense's automated analysis, prioritizing high intrinsic value upside, Quality ratings above 5.0, strong ROIC, and FCF margins, focusing on large-cap undervalued names across sectors for balanced stock watchlist.
What's the best stock from this list?
Micron (MU) leads with the highest Quality rating 8.2, 348.5% 1Y Return, and 40.9% FCF margin, making it a standout for growth-oriented MU analysis in tech.
Should I buy all these stocks or diversify?
Diversification across energy, tech, defense, and banking mitigates risks; allocate based on sector weights rather than equal-buying for optimal portfolio diversification insights.
What are the biggest risks with these picks?
Key concerns include commodity volatility (energy/mining), high debt in defense/banking, and revenue declines in some; always review risk factors per stock.
When is the best time to invest in these stocks?
Target dips toward intrinsic value floors, using market timing strategies like backtested screeners on ValueSense, amid favorable macro trends like stable rates or rising commodities.