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1 Huge Dividend That's Not as Cheap as You Think

Today, producer Austin Smith looks at Pitney Bowes, a company that looks increasingly cheap on paper and has a great dividend to boot -- but the company's valuation can be misleading.

Right now, Pitney Bowes is priced for marginally lower earnings going forward, but with a defaulting post office and cheaper alternatives, earnings could quiet down a bit faster than analysts are projecting.

Instead, you should consider more stable dividends like The 3 Dow Stocks Dividend Investors Need. Uncover these top picks absolutely free -- just click here to read more.



Austin Smith and The Motley Fool have no positions in the stocks mentioned above. Motley Fool newsletter services recommend FedEx and UPS. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

Read/Post Comments (2) | Recommend This Article (7)

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  • Report this Comment On October 13, 2012, at 3:44 PM, skat5 wrote:

    It may be a value trap. may win the day. PBI is still a dividend aristocrat, and the payout ration is around 50%. The yield is high now because the risk is high. Odds-makers are on an Obama win. I can see Romney eviscerating the postal service, subcontracting everything to fedex and UPS and firing all the postal workers, but not Obama, so I think there could be a relief rally for this stock if Obama wins.

  • Report this Comment On October 15, 2012, at 6:54 AM, trayman wrote:

    Eviscerating the postal service? Firing all the postal workers? Seems a bit draconian. Hope any president we elect isn't that cavalier with people's lives and careers. A lot of the USPS's employees are veterans - treating people like that just wouldn't be right. But I guess if you're short STMP it's something to wish for.

    PBI refused to change with a changing environment when it came to electronic postage purchased from the USPS, and now PBI is paying the price and losing market share to STMP. It's the natural course of things, why do you think all of the four legged dinosaurs died off - failure to adapt in a timely manner.

    If the USPS wants to survive it needs to get competitive on the parcel post/shipping side of it's business. STMP helps them do that on the shipper's end - it's up to the USPS to complete the process on their end.

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Related Tickers

10/24/2016 4:00 PM
FDX $172.08 Up +1.88 +1.10%
FedEx CAPS Rating: ****
PBI $17.32 Up +0.17 +0.99%
Pitney Bowes CAPS Rating: **
STMP $95.69 Up +3.50 +3.80% CAPS Rating: ****
UPS $108.45 Up +1.29 +1.20%
United Parcel Serv… CAPS Rating: ****