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5 High Yield S&P 500 Stocks for Less Than Book Value

High-yield investing is popular especially in times of low interest rates. A big problem with this strategy is that high-yield stocks often have strange valuations and it is hard to get real bargains. One way to find bargains is to scout for stocks with a market capitalizations below book value. This means if you purchase a part of the company for a dollar, you get more than one dollar in company’s equity. Investors who use this strategy should take a closer look at the accounted values of the company in order to identify asset bubbles. With this thesis in mind, let’s look at the S&P 500 index.

I screened the S&P 500 by stocks with a dividend yield of more than 5%. In addition to the high dividend yield, the market capitalization should be less than the accounted book value of the company. Here are the results sorted by dividend yield.

1. CenturyLink (CTL) is acting within the domestic telecom services industry. The company has a market capitalization of $21.5 billion, generates revenues in an amount of $9.6 billion and a net income of $765.2 million. It follows P/E ratio is 14.8 and forward P/E ratio 18.8, P/S 2.3 and P/B ratio 0.97. Dividend Yield: 8.3%.

2. Cincinnati Financial (CINF) is acting within the property and casualty insurance industry. The company has a market capitalization of $4.8 billion, generates revenues in an amount of $3.9 billion and a net income of $296.0 million. It follows P/E ratio is 16.1 and forward P/E ratio 19.5, P/S 1.2 and P/B ratio 0.94. Dividend Yield: 5.5%.

3. Hudson City Bancorp (HCBK) is acting within the savings and loans industry. The company hasa market capitalization of $3.2 billion, generates revenues in an amount of $2.5 billion and a net loss of $213.9 million. It follows P/E ratio is not calculable and forward P/E ratio amounts to 8.6, P/S 1.3 and P/B ratio 0.66. Dividend Yield: 5.2%.

4. People's United Financial (PBCT) is acting within the savings and loans industry. The company hasa market capitalization of $4.7 billion, generates revenues in an amount of $933.9 million and a net income of $158.3 million. It follows P/E ratio is 27.5 and forward P/E ratio 14.7, P/S 5.0 and P/B ratio 0.82. Dividend Yield: 5.1%.

5. Ameren Corporation (AEE) is acting within the diversified utilities industry. The company hasa market capitalization of $7.7 billion, generates revenues in an amount of $7.7 billion and a net income of $94.0 million. It follows P/E ratio is 84.0 and forward P/E ratio 13.9, P/S 1.0 and P/B ratio 0.99. Dividend Yield: 5.0%.

Take a closer look at the full table of S&P 500 high yields. The average P/E ratio (P/E ratio) amounts to 23.3 while the forward P/E ratio is 15.4. The dividend yield has a value of 6.2%. Price to book ratio is 2.9 and price to sales ratio 2.4. The operating margin amounts to 13.8%.

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Dividend
I am a private full time investor searching for investments and investment ideas.

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