You can find plenty of stocks with low price-earnings ratios and high dividend yields--usually a winning combination. Look closely at the underlying companies, however, and you may find balance sheets buckling under weighty debt loads or deteriorating profits, making the stocks much less of a bargain than they appear on the surface. More promising are dividend-paying stocks that have solid long-term prospects but appear to have hit some speed bumps. Buying these stocks involves taking a chance that their businesses will revive. In exchange for that risk, you can get stocks with low P/Es and above-average yields. If the companies' turnaround plans show even modest signs of success, the stocks could take off.
One stock in this camp is International Business Machines (symbol IBM, $148.14), a favorite of Warren Buffett, who owns shares through his holding company Berkshire Hathaway (BRK.B $131.47). Expectations for Big Blue are now low, to say the least. United Technologies (UTX, $93.31) also looks like a promising turnaround candidate. The company makes aircraft engines through its Pratt & Whitney division, along with Otis elevators, Carrier air conditioners and other products. Despite its strong lineup, the business has been in a funk. Clothing retailer Gap (GPS, $32.23) has plunged deep into the bargain bin, tumbling 26% this year. Sales have been sliding at its flagship Gap stores and Banana Republic chain. Analysts worry that Gap is also losing out to such "fast-fashion" retailers as H&M and Zara, which rapidly crank out high-end designs at rock-bottom prices.
Source: Jewish World Review
Related Articles:
- 6 High-Yielding Mega-Cap Stocks
- Dividend Investors Should Focus On Stocks, Not The Market
- The Secret Ingredient of Dividend Growth Stocks
- 9 Dividend Stocks With A 10%+ Dividend Growth Rate
- 3 Styles Of Successful Dividend Investing
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
All seven equities on this list have dividend yields above 13%, but the highest one yields nearly 27%! In addition, each equity has a positi...
-
Dividend safety is especially important when stock prices are falling. Many companies cut their dividend payouts in 2020 during the coronavi...
-
Investors in retirement may desire additional income. Those who don’t have a pension are likely relying on Social Security, and their retire...
-
Dividend Aristocrats have a massive fan following among income investors, and for good reason: These are the only 65 stocks to have increase...
-
Investing in dividend-paying stocks is a good way to generate fairly reliable income. However, that strategy doesn't necessarily mean yo...
-
The four dividend-paying retail technology stocks to buy towered over the rest at a BoA Global Research Consumer & Retail Technology C...
-
Sometimes, stocks are a bargain because the company's prospects are being overlooked, and sometimes, it's just the result of a broad...
-
High yields are often found in sectors that are out of favor, which is why you can get some pretty impressive dividends from the energy sect...
-
Chasing growth is usually the right move for younger investors, but it can be a risky strategy for retirees. Generally speaking, retirees sh...
-
Of all the places to invest, there may not be a more recession-proof sector than water stocks. Consumers need access to clean water for drin...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.