20 Potentially Undervalued Stocks With High Dividend Yields

Value investing is back.  Investors are flocking to anything with perceived value to avoid the market swings we are seeing every day.  There are many different methods and formulas you can use to identify undervalued dividend stocks.  The dividend growth model is one that we have mentioned before.  Discounted cash flow and comparing current dividend yield to average yields are also often used.

We didn’t use any of those models to identify these three stocks.  Instead we first found stocks trading at a price to book value ratio of less than 1.  We further filtered that list down by removing any stock with a P/E and PEG ratio above their specific industry average.  It’s important to compare P/E ratios to industry averages instead of index averages because not all industry trading at the same level.

After drilling down into value we then sorted stocks by dividend yield to only include those with a yield of 3% or more.  We ended up with over 20 stocks many of which are REITs.  Each of these stocks has a story and it’s important to do your homework to determine if these fundamentals are predicting a big upside or a possible problem at the company.

A good example would be two stocks you’ve probably heard of before – Whirlpool and Computer Science Corp.  Both had disappointing earnings results recently and have analysts concerned about future growth.  Other stocks such as Transocean have solid fundamentals, a high yield and the backing of many analysts making it one of the best dividend stocks on the list.

CompanySymbolPrice /
KT CorporationKT0.826.872.295.25
SK Telecom Co., Ltd.SKM0.926.50.884.95
Sims Metal Management Ltd.SMS0.948.540.53.41
Speedway Motor Sports, Inc.TRK0.6310.542.113.11
Hooker Furniture CorporationHOFT0.869.490.793.98
Brown Shoe Company, Inc.BWS0.957.390.483.17
American Greetings CorporationAM0.815.520.553.69
Seaspan CorporationSSW0.688.920.485.85
ArcelorMittal SAMT0.517.510.383.27
ITT CorpITT0.4320.28
Computer Sciences CorporationCSC0.885.790.673.02
Transocean LtdRIG0.7710.890.546.32
Whirlpool CorporationWHR0.988.340.563.41
Redwood Trust, Inc.RWT0.8811.12.479.3
Starwood Property Trust IncSTWD19.642.149.04
Apollo Commercial Real EstateARI0.858.671.1611.45
Chimera Investment CorporationCIM0.785.212.621.84
Colony Financial IncCLNY0.777.261.218.92
Ashford Hospitality Trust, IncAHT0.548.410.233.88
Hatteras Financial CorporationHTS0.996.893.8115.33
6 replies
  1. Dave
    Dave says:

    As you note, CSC’s disappointing earnings results had the stock price gap down. Historically, CSC performs very well when traded this time of year (the latter half of November). Could make for a good value investment…

  2. sandi miller
    sandi miller says:

    i really like gabelli and their monthly dividends. can anyone suggest a couple of others besides annaly, will check back shortly

  3. sandi miller
    sandi miller says:

    i appreciate it very much. looking to spread out a little more as soon as i can unload some sunoco without it being in a pit. really like gabelli but thinking about maybe opening a etrade account to avoid high broker fees on some purchases that will be short term any suggestions?

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