3 Dividend Stocks Wall Street Is Wrong About

There countless dividend-paying stocks to choose from on any given day -- some are expensive while others seem cheap. And while Wall Street is usually pretty good at valuing stocks, it isn't 100% accurate. Here are three stocks that our analysts believe are mispriced, and why they feel that way:

Dan Caplinger: One of the hardest-hit dividend stocks in the market recently has been casino giant Wynn Resorts , which has had to deal with an unusual combination of business challenges lately. Like other casino stocks, Wynn has seen big problems in its Macau operations, with the decline in traffic in the Asian gaming capital weighing on overall sales and profits throughout the company. At the same time, Wynn is having to deal with a proxy fight involving Elaine Wynn, ex-wife of co-founder and CEO Steve Wynn, who had her seat on the board of directors eliminated and was not nominated to any of the other seats up for election at this year's shareholder meeting.

Bearish investors are concerned that Macau's troubles could be just the beginning if China clamps down on the gambling mecca's growth. Yet past fears of greater regulatory scrutiny have never panned out in the past, and despite growing pains as it adapts to changed conditions in Macau, Wynn Resorts has a new property in the works there that could help reinvigorate the casino market. With a consistent track record of rising regular dividends and frequent special dividends, Wynn Resorts looks like a good long-term play even if Macau's struggles continue for a while.

Matt Frankel: After a dismal earnings report brought on mainly by weak commodity prices and poor global growth, Caterpillar has fallen by about 13% so far in 2015, and is off a whopping 27% since last summer's highs.

Due to weak economic growth, Caterpillar saw its construction industries sales fall 9%, and its mining division did even worse, losing 10%. And this makes perfect sense -- after all, with depressed commodity prices it's tough for mining companies to justify purchasing new equipment.

Also, the drop in oil and gas prices hasn't fully appeared in Caterpillar's earnings yet. The company's 2015 outlook calls for earnings to drop by about 20% from what it reported in 2014.

However, for long-term investors, these issues should be temporary. Most experts agree that oil prices will go back up -- they just disagree on the "when" and "how much." For commodities and oil prices, I certainly believe there is a lot more potential to the upside than to the downside at this point, so investors' downside risk is somewhat limited. For example, I think it's more likely for oil to gain $20 per barrel than to lose another $20 at this point.

There's no question that the next few years could certainly be very turbulent for Caterpillar, but from a long-term perspective, the current entry point looks very attractive. And in the meantime, you'll be paid a handsome dividend yield of about 3.5%, which should be very safe since it represents just 60% of the new, lower 2015 earnings outlook.

Jordan Wathen: Wall Street has a love affair with Home Depot . Since bottoming in 2009, the stock has returned more than 500%, dividends included. Analysts continue to walk up their price targets and earnings estimates, based on its recently strong performance.

Investors and analysts alike have seemingly forgotten that Home Depot is a cyclical business. It will do well in good housing markets and perform terribly in downturns.

The stock currently trades for 25 times last year's earnings and free cash flow, an expensive price for a mature retailer, in my view. A fair price might be closer to 20 times its 2014 earnings and free cash flow, or a valuation about 20% lower than it trades today. Home Depot is a great company, but at this price it doesn't appear to be a great investment.

The article 3 Dividend Stocks Wall Street Is Wrong About originally appeared on Fool.com.

Dan Caplinger owns shares of Wynn Resorts, Limited. Jordan Wathen has no position in any stocks mentioned. Matthew Frankel owns shares of Caterpillar,. The Motley Fool recommends Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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