- These 6 dividend-paying stocks with market caps over $10 billion have characteristics that make them attractive to bargain-oriented investors.
- HP Inc. (HPQ): This printing company has a dividend yield of 2.7% and a forward P/E of 8.2x with a yield of 16.7% FCF.
- LP Energy Transfer (HEY): This pipeline company has a 7.2% return paid over the past 15 years and 7.5 times the forward P/E.
- Avnet (AVT): An electronics distributor with a return of 2.2% paid for the last eight years and a forward P/E of 7.2 times.
- KT Corp (kt): Korean telecoms with a paid return of 5.2% over the last 6 years and a forward P/E of 6.6 times.
- NRG Energy (NRG): Houston energy company with a 3.3% return paid over the past 11 years with a forward P/E of 11.8 times.
- United Microelectronics (CMU): Taiwanese chipmaker with a 3.4% return paid over the past 11 years and a forward P/E of 6.7x.
Many investors are currently looking for dividend stocks to buy. However, it is important to consider many factors of any stock, not just its dividend.
These six dividend-paying stocks are attractive to value investors because they have good dividend yields and have paid consistently over the past few years.
Additionally, stocks have a low forward price-to-earnings (P/E) ratio, typically less than 10. This means stocks are viewed by the market as reasonably priced and could be ideal for investors focused on the good deals.
|HEY||LP Energy Transfer||$11.43|
HP Inc (HPQ)
HP Inc. (NYSE:HPQ) is a low-tech company that has a decent yield of 2.7% as well as a sizable and substantial buyout program. Its annual dividend is $1 per share, equivalent to 23% of its projected earnings per share (EPS) of $4.26 for 2022. Additionally, HP has produced 11 consecutive years of dividend increases, as well as 32 years of continuous dividend payments.
Based on analyst estimates, HPQ shares are trading at just 8.2 times forward earnings estimates.
HP has sufficient cash flow. In the first quarter, it achieved $1.7 billion in cash flow from operations (CFFO) and FCF of $1.4 billion. From that, HP paid $271 million in dividends and spent $1.5 billion on stock buybacks.
Warren Buffett loves HP and recently took a large 11.4% stake in the company. HPQ stock is likely to be one of the top dividend-paying stocks to hold for the long term.
LP Energy Transfer (ET)
This gas pipeline and energy storage company (operating in Texas and Oklahoma) pays a sufficient dividend of 80 cents per year. That gives it a dividend yield of 7.2% based on its May 16 price of $11.
Besides, LP Energy Transfer (NYSE:HEY) has consistently paid dividends over the past 15 years, according to Looking for Alpha. This gives investors great assurance that the company will pay their investors every year, even in times of recession or high inflation.
Bargain-focused investors will be reassured to know that it is trading at a low forward P/E of just 7.5x expected 2022 EPS.
This means that its valuation is very cheap and suitable for low-priced investors.
Electronic dispenser Avnet (NASDAQ:AVT) pays a dividend of $1.04 per year, giving the stock a dividend yield of 2.2%. The company has paid an annual dividend for the past 8 years.
Earnings estimates for this year are $6.85 per share, which is more than enough to pay the $1.04 dividend going forward. Additionally, at $46.85 per share, the stock is trading on a forward P/E of just over 7.
Earnings are expected to rise from $2.71 earnings per share (EPS) in 2021 to $6.85 this year and $6.82 next year. This is mainly due to the higher price of chips and other technology-related items, as well as higher logistics-related revenue.
This makes Avnet a very cheap stock suitable for bargain-oriented investors.
KT Corp (KT)
KT Corp (NYSE:kt) is a Korean telecommunications operator that also offers broadband services throughout South Korea. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting and other related services.
The company pays an annual dividend each year and recently declared its dividend on April 27 for 75.47 cents. It won’t be ex-dividend until December 30, 2022, until the next dividend is declared in May 2023. This gives it a dividend yield of 5.36% if next year’s dividend is the same. next year.
This is one of the rare cases where the ex-dividend date is actually 4 months before the declaration date. You should therefore buy the stock assuming that the new dividend will be close to the level of the old dividend.
The stock has a forward P/E of 6.6x, according to Looking for Alphaa. As a result, it’s one of the dividend-paying stocks bargain-focused investors will love.
NRG Energy (NRG)
NRG Energy (NYSE:NRG) is a Houston-based integrated power company with a 3.3% yield and growing dividends. It is one of the largest independent power producers in the United States. It has 7 million customers and generates 18 gigawatts of power generation capacity primarily in Texas.
NRG stock is attractive to bargain-oriented investors as it offers a dividend yield of 3.3% and nine years of continuously paid dividends. Additionally, analysts expect EPS of $3.59 this year and $4.23 next year. So, trading at $42.40 on May 16, NRG shares are trading at 11.8 times earnings this year and just over 10 times earnings estimates for 2023.
In addition, the company has numerous FCFs to cover both its dividends and its buyback programs. Last year, it generated $493 million in operating cash flow and paid just $319 million in dividends plus $48 million in buybacks.
This makes this utility stock one of the best stocks for bargain-oriented investors.
United Microelectronics (UMC)
United Microelectronics (NYSE:CMU) is a foundry semiconductor chip manufacturer with the latest in cleanroom and related technology. It operates factories in Taiwan, Singapore, China, Hong Kong, Japan, the United States and Europe. It also pays a dividend once a year and the ex-dividend date is after the declaration date. Usually the ex-date is mid-July, so there is still time to collect this year’s dividend.
Last year, the dividend was set at 28.66 cents, giving it a dividend yield of 3.4%. However, earnings and dividends are expected to be much higher this year. Given that it has paid dividends every year since 2010, chances are it will continue to pay good dividends in the future.
Last year, its dividend was 34.5%, so assuming its EPS reaches $1.12 this year, the new dividend could reach 38.64 cents per share. So at the current price of $8.29, that gives UMC shares a forward-looking yield of 4.7%.
Additionally, UMC stock has a forward P/E of just 6.7 times. This makes it one of the best stocks for bargain-oriented investors.
As of the date of publication, Mark Hake did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.