As the markets whipsawed up and down last week, investors panicked about what to do with their investments. Should they sell before things get worse or take advantage of opportunities that might be out there? It's a tough call to make sometimes. The best advice I can give is to stay the course of your investing strategy, whatever that may be.
However, if you have some cash to invest, now is a great time to pick up some really awesome dividend stocks at dirt-cheap prices. Companies that pay dividends have illustrated that over time, they have outperformed their non-paying brethren. In addition, these same companies tend to be more conservative and more focused on rewarding their shareholders by consistently shelling out those lucrative dividend payments. So if you can take advantage of a time like right now, when the market is already down 10% over the past three months, you might be able to find that hidden gem you've been looking for.
To help you on your quest, I ran a screen for material companies paying dividends above 2.0%, with P/E ratios less than 17, that are trading at least 10% below their 12-month high, and that have garnered the respect of our Motley Fool CAPS investing community with at least a four- or five-star rating. I've ranked and ordered the results by the top seven highest dividend payers.
|
Company |
Dividend Yield |
P/E Ratio |
% Below 12-Month High |
CAPS Rating (out of 5) |
|---|---|---|---|---|
| SeaDrill (NYSE: SDRL) | 10.1% | 7.5 | 22.9% | ***** |
| MV Oil Trust (NYSE: MVO) | 10.1% | 13.3 | 12.5% | **** |
| BP Prudhoe Bay Royalty Trust (NYSE: BPT) | 9.6% | 12.3 | 16.3% | **** |
| Southern Copper (NYSE: SCCO) | 8.0% | 13.1 | 38.6% | **** |
| Transmontaigne Partners (NYSE: TLP) | 7.7% | 14.6 | 20.6% | ***** |
| Enerplus (NYSE: ERF) | 7.6% | 15.8 | 14.0% | ***** |
| Natural Resources Partners (NYSE: NRP) | 7.3% | 16.4 | 21.5% | **** |
Source: CAPS data, 8/15/11.
Granted, there are probably some good reasons that some of these stocks are trading so cheaply and have fallen from grace. The majority of them are oil or gas providers or servicers, and as oil has gone down quite dramatically, so with it has gone the stock prices of these companies. And in the drilling space, competition is fierce, and with following the BP spill, some companies are still getting accustomed to new regulatory measures. Investors can hope that as day rates improve, companies like Seadrill will see an uptick in profitability.
Nonetheless, these stocks are paying absolutely phenomenal dividends, and they are trading extremely cheap, so if you have interest in them, it would pay to do your own due diligence and look into them further.
Seeking out other dividend stocks that could help boost your portfolio? Check out my Foolish colleague's brand new free article, "U.S. Downgrade Be Damned: Here’s What I’m Buying Now."
