The Cheapest 6.9% Dividend Portfolio You’ve Ever Seen

- Advertisement -

- Advertisement -

What if I told you that, in a market that is expensive, there are nine Dividend Stocks with a Price-to-Earnings (P/E) Ratio less than nine,

And this low P/E ratio pays out 6.9% per year in dividends?!

- Advertisement -

If I hadn’t researched and written it, I wouldn’t have believed it myself. But in a minute I’ll share the details about this 9-pack, which is 4.2% off 19.2%,

We are unlikely to see these hidden gems on mainstream financial websites. With the S&P 500 in the stratosphere, these grassroots bargains are being overlooked. But we look at these dirt-cheap dividend stocks by contrast:

  1. Claim the P/E ratio that the average is just 8.5.
  2. Collectively yielded 6.9%.

let’s start with LyondellBasell (LYB, yield 5.1%), a Dutch-headquartered multinational chemical firm that is the top producer of polypropylene and the largest licensor of polyolefins, both have a wide range of uses from consumer packaging to automobile parts.

LYB has underperformed the market in 2021, trading nearly flat compared to the roughly 25% return for the S&P 500. And it has kept it dirt-cheap at just 5.5 times earnings estimates.

We must admit that Liondale is “cheap for a reason.” Namely, the company is expecting a major operational pullback in 2022: a 4.4% drop in revenue and a roughly 19% drop in earnings due to rising input costs.

Tax-Prep Services Firm H&R Block (HRB, yield 4.4%) Might as well be running in headwinds. The stock outperformed the market as stimulus and other COVID measures triggered new tax headaches. It hit the entire tax-preparation industry for a year—however, H&R faces the challenge of retaining those customers. This is a forward P/E of 9, to be taken into account.

Strategic Education (STRA, yield 4.2%) And Western Union (WU, 5.7% yield) find themselves in the bargain box as their business model is challenged.

Take Western Union, which at a P/E of 7.7 onwards is certainly attractive from a valuation standpoint. So too is the yield of about 6%. But the stock is collapsing under the weight of transformative changes in its industry — both from traditional electronic-payments firms, as well as the rise of cryptocurrencies.

Meanwhile, Strategic Education—the product of the 2018 merger of for-profit educators Strayer and Capella Education—is a longtime underperformer that faces the prospect of a rapidly evolving educational landscape that challenges even the most pious traditional institutions. is giving. Its cheaper 13.8 forward P/E reflects these difficulties as well as expectations of an operational move next year.

is more attractive Chevron (CVX, 4.8% Yield), which is trading at 11 times the earnings estimates. Rising oil and gas prices aren’t an automatic win for integrated major Chevron, where the benefits to its E&P division are offset somewhat by higher input costs for its vast refining operations. Still, the confluence of better energy prices and rebounding demand for its refined products ultimately bodes well for CVX prices.

And it’s hard not to like the finesse and flexibility of the Chevron. Even as it was conserving cash during the COVID energy crisis, it bought Noble Energy for $5 billion all stock deal. It also managed to increase its dividend and recently revived its share-repurchase program.

One sector with many attractive values ​​is the insurance industry, where rising rates benefit insurers who want to invest policyholder premiums in low-risk assets.

I just praised the virtues NS Prudential Financial (PRU, 4.3% Yield), whose businesses include individual life and group insurance, annuities, retirement-related services and investment management.

“Management knows a lot when it sees — 10% of PRU’s stock has been repurchased over the past five years,” I said. And Prudential is now getting a deal on its own shares at 9 times earnings estimates.

However, it is not the only attractive insurer. Unam Group (UNM, yielding 4.8%) Disability insurance tops in both the US and UK. Other products offered include life, critical illness and accident insurance. And Wall Street appears to be sleeping on its growth prospects — despite forecasting a 16% gain in 2022, UNM trades at a slim 5.5 times earnings estimates.

Another insurer worth looking into is Old Republic International (ORI, 3.5%)-An old guard general- and title-insurance provider whose title yield is a more powerful income producer. my . Consider it ORI. recent look at,

“Where ORI payouts range from ‘good’ to ‘great,’ it’s a fairly consistent special dividend. The Old Republic uses a two-part dividend system that sees the insurer pay a regular dole, Also makes annual special payments based on your profit for the year.

Wisely, its 22-percent dividend — which, for 40 years in a row has grown to make it a mid-cap aristocrat — is only good for a 3.5% yield, which is outside our 4% screen. However, tack on the $1.50-per-share special cash dividend announced in September, and you’re looking at a mouth-watering 9.2% yield,

Sweetening the pot has a 9.5 forward P/E.

Speaking of special dividend, let’s give OneMen Holdings (OMF, 5.7% Yield) another form. The company, which operates under OneMain Financial, provides personal installment loans to approximately 2.2 million customers, many of them with non-prime credit scores.

It is a cyclical business, but it is a business that has grown like a weed during COVID. And it has boosted the dividend in a big way. Instead of paying special dividends individually, the OMF sets the “floor” for quarterly dividends, then pays at least, or possibly more. At the end of 2020, OMF set a floor for its dividend at 40 cents per share. This year, it paid a dividend of $3.95 per share, then 70 cents per share (setting a new floor in the process), then $4.20 per share, and another 70 cents. That translates to earnings per share of $9.55 a . happens in 19.2% total yield at current prices!

And we’re getting that yield for just 5.5 times the estimate.

Brett Owens is Chief Investment Strategist Contrarian Outlook, For more revenue streams, get your free copy of their latest special report: Your Early Retirement Portfolio: 7% Dividend Every Month Forever,

Disclosure: none


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox