Contrarian investors should utilize times like this to differentiate between stocks that are dropping for fundamentally sound reasons -- and those stocks that are simply being dragged down because of general market concerns. Sure, there's plenty to worry about -- gigantic federal deficits, sovereign debt problems in Europe, an economic slowdown in China. But let's not forget that in the midst of all of this volatility lies the prospect to grab some great companies at dirt cheap prices.

In particular, I'm a huge fan of dividend stocks. Renowned professor Jeremy Siegel has illustrated that from 1957 to 2003, when reinvesting dividends, the S&P's 100 highest-yielding stocks outperformed the market by an average of 3 percentage points. Over a long period of time, three percentage points can really add up. So if you can find dividend stocks trading cheaply, and can separate the good from the bad, you may have found yourself a real winner.

In this regular series, I run a screen for dividend stocks that have gotten crushed in the past three months, in addition to companies that are trading at low P/E's. Below is a selection of stocks that I like, additionally rated by our own 170,000-strong CAPS community.

Company 

3-Month Change

P/E Ratio

Dividend Yield

CAPS Rating (out of 5)

Frontline (NYSE: FRO)

(34.9%)

14.3

2.3%

****

Star Bulk Carriers (Nasdaq: SBLK)

(22.7%)

4.1

10.0%

****

Safe Bulkers (NYSE: SB)

(19.7%)

4.7

8.2%

****

Paragon Shipping (Nasdaq: PRGN)

(17.4%)

9.7

7.7%

****

Navios Maritime Holdings (NYSE: NM)

(8.9%)

9.0

4.6%

*****

Source: Motley Fool CAPS as of May 31, 2011.

Unfortunately, the dry bulk shipping industry hasn't had such a great year. The Baltic Dry Index, which tracks pricing for several different types of bulk carriers, has seen a rocky road. It's down for 2011 and has seen a pretty steep drop since last fall.

The problem for most of these companies is an oversupply of ships that came about during the easy financing days before the 2008 crash. Now companies have idle ships, and that has driven overall pricing downward.

However, many dry bulkers have started to diversify their fleets and have gotten into container shipping. My Foolish colleague Andrew Tonner has suggested looking at Danaos (NYSE: DAC) and Seaspan (NYSE: SSW) for investments with a bit more of an upside.

A Foolish final thought
Many of the companies listed above pay great dividends and have really gotten beaten down in the past few months. It's up to you to do some more research to see if there's a value play there or if their low P/E ratios are truly justified. One of them could just be the outrageous dividend stock you've been looking for.

Jordan DiPietro owns no shares. The Motley Fool owns shares of Seaspan. Motley Fool newsletter services have recommended creating a write covered straddle position in Seaspan. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.