Dividends4Life: 6 Cheap Dividend Stocks You Can’t Afford to Ignore

Yields on dividend stocks are significantly higher than they were last year, but they’re still pretty paltry compared with historical norms. The yield on the S&P 500 is now up to 2.27%, according to Birinyi Associates. A year ago, dividend stocks in the benchmark index offered a yield of just 1.97%. Neither of those numbers is good compared to the average 3.05% yield on S&P 500 dividend stocks since 1960 is 3.05%, according to New York University’s Aswath Damodaran. In addition to less-than-stellar payouts, decent yields are hard to come by in another way: There’s just not a whole lot of choice. Only about only about 20 companies in the S&P 500 carry dividend yields of at least 4%.

You don’t want to overpay for yield, so you want to identify cheap stocks. After all, dividend stocks are best used as long-term holdings, and valuations tend to revert to the mean over time. That means shares with high price-to-earnings multiples are in danger of having a day of reckoning. Cheap stocks, however, can get a boost from multiple expansion. With all that in mind — and it’s a lot — we scoured the S&P 500 for cheap dividend stocks that you should be piling into. Here are six of the best: Pfizer Inc. (PFE), Verizon Communications Inc. (VZ), Ford Motor Company (F), HCP, Inc. (HCP), General Motors Company (GM) and AT&T Inc. (T).

Source: InvestorPlace

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