10 top-rated, low-priced dividend picks

These stocks are historically undervalued and offer attractive yields.

By TheStockAdvisors Aug 31, 2012 7:21AM
Image: Arrow Up, Nicholas Monu,iStock Exclusive,Getty ImagesBy Isabelle Sender, S&P Capital IQ, The Outlook

In our latest stock screen, we looked for dividend-paying stocks with low P/E multiples that also earn a strong "buy" recommendation from our analysts.

For investors who believe U.S. equity valuations are unduly depressed, there are several stocks that carry S&P Capital's top ranking of 5 stars, or "strong buy," that trade significantly below current and historical benchmark valuations and offer attractive yields.

Currently, valuations appear attractive when compared with historical data. As of the S&P 500's Aug. 10 close, the large-cap benchmark was trading at a price-to-earnings multiple 13.6 times S&P Capital IQ equity analysts' earnings-per-share estimates for 2012, while the S&P 1500 Composite's P/E was 14.1.

Historically, the median P/E for the 500’s operating results since 1988 is 17.9 times and 15.7 times for earnings reported under generally accepted accounting principles (GAAP) since 1936.

S&P Capital IQ Chief Equity Strategist Sam Stovall’s interpretation of S&P 500 history and technical indicators suggests the market has a good chance of extending its current rally. He believes the S&P 500 “could rise to between 1450 and 1500+ by the end of 2012.”

The 10 stocks listed below are U.S.-traded companies ranked 5-STARS (our highest, strong buy rating) with a P/E ratio equal to or less than 10, and a dividend yield higher than 2%.

  •     Aflac (AFL) -- yielding 2.9 with a p/e of  7.1
  •     Barrick Gold (ABX) -- yielding 2.2% with a p/e of 8.2
  •     Chevron (CVX)  -- yielding 3.2% with a p/e of 8.3
  •     Huntington Bancshares (HBAN) -- yielding 2.7% with a p/e of 8.8
  •     Johnson Controls (JCI) -- yielding 2.7% with a p/e of 10
  •     Magna International (MGA) -- yielding 2.4% with a p/e of 8.3
  •     Microsoft (MSFT) -- yielding 2.6% with a p/e of 9.9
  •     Rio Tinto (RIO) -- yielding 3.5% with a p/e of 6.9
  •     Travelers (TRV) -- yielding 2.9% with a p/e of 10
  •     Valero Energy (VLO) -- yielding  2.4% with a p/e of 7.6
More from TheStockAdvisors.com
Aug 31, 2012 9:04AM
This will be a nice list only if O is defeated. 
Sep 3, 2012 2:36PM
Sep 3, 2012 5:42PM
Even on labor day the Yahoo idiots are out putting out stuff ridiculous as they do every single day. Yes, low-price stocks are not $110 a share range and although Chevron might be good as a dividend yield, it does not fit into this article.  It might if the article was entitled "Stocks with both good dividend yields and great P/E ratios". What happened to intelligent writing and journalism? Oh, Yahoo was formed and put out a want ad reading, "if you think you are a writer but you really are not, and have no clue as to what journalism is, then you are hired".  They get articles from rejects that can't sell them to anyone else certainly respectable outlets for journalism. When is the new Yahoo CEO going to wake up and add some class to this company for the very first time. This is not a one time remark--every day I see it in their articles and I just shake my head that anyone would actually publish writing (?) like this. Or my favorite, when they tell you "Here are 5 things....." and the article stops cold without addressing the actual "5 things". Pick a day--any day.
Sep 3, 2012 1:12PM

low Price stocks. How is $110 for Chevron A low Price Stock!!!

Low price is something under $20, To me.

Sep 1, 2012 5:45PM
The old fashion buy and hold is working again. Pure and simple. Mutual funds return 8.7% so far this year in 8 months with more to go.
Aug 31, 2012 6:35PM

THIS IS CRAZY!!! The wealthy in this country have been getting all the money. NO MORE!!! Goooogle search ''FAST SLICK RICH'' and go to the 1st site. Then click on the insurance.page to see how the rich are making tons of tax free cash. The best part is that now we can do it. THIS IS A MUST SEE!














you are single and mature in life or financially in career, why not date a sugar baby to feel young again...

It will make you believe that "love is a force that can't

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125 rated 1
267 rated 2
455 rated 3
612 rated 4
682 rated 5
695 rated 6
632 rated 7
472 rated 8
279 rated 9
147 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.