Dividends4Life: Cheap High Dividend Yield Stocks

Cheap High Dividend Yield Stocks

Posted by D4L | Friday, January 13, 2012 | | 0 comments »

Whether a stock is cheap or not has nothing to do with its actual price. There are stocks in the market right now that would be overpriced at one penny and others, like Apple (AAPL), that are a bargain at $400+. (In the case of Apple, analysts predict the stock could go as high as $700 a share within the next year.) Instead, investors would do better to concentrate on how the stock is priced. Specifically, how a stock is priced relative to its book value (price-to-book ratio, or P/B ratio) and how it is priced relative to its earnings (price-to-earnings ratio, or P/E ratio).

Dividends are another issue. Dividends can be used to offset losses as well as reinforce returns. As such, finding a stock that pays high dividends while offering a low P/B ratio, as well a low P/E ratio usually means a good thing. Using the stock screener at finviz, we identified six stocks that fit this criteria. Specifically, we looked for stocks with high dividends, P/B ratios less than 1.5 and P/E ratios less than 12.

Source: Seeking Alpha

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