In the ever-changing stock market landscape, opportunities to invest in high-quality dividend stocks at attractive prices don’t come along every day. That’s why I’m especially excited about the current valuation DCC (LSE:DCC), FTSE100 a company that has long been on my radar due to its consistent dividend payments and growth potential.

What does it do?

DCC, an energy sales, marketing, and distribution powerhouse, is currently trading at what appears to be a significant discount, at least according to discounted cash flow (DCF) calculations. According to those calculations, the stock is trading 39.8% below its estimated fair value. Of course, that’s no guarantee, but it definitely gives me reason to do more research.

So what makes the company stand out in a crowded field of dividend stocks? First and foremost, it offers a solid dividend yield of 3.45%. While not the highest yield on the market, it is a decent yield, especially considering the company’s growth prospects and financial stability. The sustainability of this dividend is bolstered by a 60% payout ratio, which I think strikes a good balance between rewarding shareholders and retaining earnings for future growth. This suggests that the dividend is both sustainable and has the potential for future growth.

Looking ahead, analysts are forecasting DCC earnings to grow by 9.52% per year. If this growth trajectory is correct, it could support future dividend increases, potentially increasing total returns for long-term investors. The company’s financial health is equally impressive, with some analysts describing its balance sheet as “perfect.”

This financial strength provides a solid foundation for dividend maintenance and potential growth, even in complex economic conditions. To me, it is infrequent to see such a powerful growth forecast alongside the potential for dividend yield growth.

A great year

The company’s performance in the market has been remarkable – over the past year the company’s shares are up an impressive 35.6%, significantly outperforming its peers in the sector and the wider UK market.

This suggests powerful investor confidence in the company’s prospects. Furthermore, by operating across multiple geographies and sectors, DCC offers investors built-in diversification that can support mitigate the risks associated with market volatility.

Lots of potential and risk

Of course, no investment is without risk. DCC operates in the energy sector, which can be subject to fluctuating commodity prices and regulatory changes, especially when a novel government is in place. So, while the company has outperformed the market recently, past performance is no guarantee of future results.

However, given DCC’s current valuation, powerful financial position and dividend history, I see this as a fairly attractive opportunity to add some high-quality dividend stocks to my portfolio. In my opinion, it’s not often that we see such a compelling combination of value, profitability and growth potential in a FTSE 100 company, so I’ll buy the stock at the next opportunity.