Dividends4Life: Insanely Cheap Dividend Stocks

Insanely Cheap Dividend Stocks

Posted by D4L | Tuesday, July 31, 2012 | | 0 comments »

It’s rare to find stocks with dividend yields that are in the neighborhood of their price-to-earnings (P/E) ratios. But the persistent concerns about global growth have created an unusually high number of these inexpensive yield opportunities in the energy and materials sectors. Notably, many of these value plays aren’t royalty trusts or REITs, and they aren’t troubled stocks or obscure names with sub-$5 stock prices. Instead, they’re some of the largest and most recognizable names in the global markets:

Vanguard Natural Resources (NYSE:VNR), China Petroleum & Chemical (NYSE:SNP), Total (NYSE:TOT), ENI (NYSE:E), Royal Dutch Shell (NYSE:RDS.A), BP (NYSE:BP), Vale (NYSE:VALE), Rio Tinto (NYSE:RIO) and Freeport McMoRan (NYSE:FCX). There’s no doubt, any of these energy and materials stocks could be hit hard in the short term — if Europe blows up, P/Es and yields aren’t going to matter. The solution to this conundrum — short-term risk, long-term potential — is to scale in. Build positions slowly, adding on weakness and selling calls on strength to boost the income stream.

Source: InvestorPlace

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