My 3 Favorite High-Yielding And Cheaply Priced Stocks From The S&P 500

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Oct 25, 2013
I remember times when the popular S&P 500 index had more than 15 constituents of high-yields. Today we only have seven!

Yes, the market is getting more and more expensive. The S&P 500 is up 22.85 percent this year and marked all-time highs. In times when P/Es of 20 or more are the new valuation standard, it’s more important to keep an eye on cheaply priced stocks.

That’s the main reason why I would like to produce a screen from the mainstream index S&P 500 by the cheapest and highest yielding stocks measured with a forward P/E of less than 15 and a dividend yield over 4 percent.

Only 16 corporate stocks fulfilled these criteria of which five have a buy or better rating. Utilities are the dominating investment category.

Here are my favorite stocks:



Altria Group (MO)
has a market capitalization of $72.08 billion. The company employs 9,100 people, generates revenue of $24.618 billion and has a net income of $4.183 billion. Altria Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.487 billion. The EBITDA margin is 30.41 percent (the operating margin is 25.91 percent and the net profit margin 16.99 percent).

Financial Analysis: The total debt represents 39.28 percent of Altria Group’s assets and the total debt in relation to the equity amounts to 438.07 percent. Due to the financial situation, a return on equity of 121.70 percent was realized by Altria Group. Twelve trailing months earnings per share reached a value of $2.19. Last fiscal year, Altria Group paid $1.70 in the form of dividends to shareholders. Forward P/E: 14.04.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.41, the P/S ratio is 2.93 and the P/B ratio is finally 22.81. The dividend yield amounts to 5.34 percent and the beta ratio has a value of 0.46.

Lockheed Martin (LMT) has a market capitalization of $42.56 billion. The company employs 120,000 people, generates revenue of $47.182 billion and has a net income of $2.745 billion. Lockheed Martin’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.470 billion. The EBITDA margin is 11.59 percent (the operating margin is 9.40 percent and the net profit margin 5.82 percent).

Financial Analysis: The total debt represents 16.32 percent of Lockheed Martin’s assets and the total debt in relation to the equity amounts to 16,174.36 percent. Due to the financial situation, a return on equity of 527.88 percent was realized by Lockheed Martin. Twelve trailing months earnings per share reached a value of $9.29. Last fiscal year, Lockheed Martin paid $4.15 in the form of dividends to shareholders. Forward P/E: 13.70.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.28, the P/S ratio is 0.90 and the P/B ratio is finally 1,091.56. The dividend yield amounts to 4.01 percent and the beta ratio has a value of 0.88.

American Electric Power (AEP) has a market capitalization of $22.74 billion. The company employs 18,513 people, generates revenue of $14.945 billion and has a net income of $1.218 billion. American Electric Power’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.783 billion. The EBITDA margin is 32.00 percent (the operating margin is 17.77 percent and the net profit margin 8.15 percent).

Financial Analysis: The total debt represents 34.47 percent of American Electric Power’s assets and the total debt in relation to the equity amounts to 122.98 percent. Due to the financial situation, a return on equity of 8.42 percent was realized by American Electric Power. Twelve trailing months earnings per share reached a value of $2.49. Last fiscal year, American Electric Power paid $1.88 in the form of dividends to shareholders. Forward P/E: 14.10.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.78, the P/S ratio is 1.52 and the P/B ratio is finally 1.49. The dividend yield amounts to 4.28 percent and the beta ratio has a value of 0.42.

Take a closer look at the full list of the top yielding stocks with cheap P/E's from the S&P 500 market index. The average P/E ratio amounts to 19.44 and forward P/E ratio is 13.69. The dividend yield has a value of 4.77 percent. Price to book ratio is 7.39 and price to sales ratio 1.70. The operating margin amounts to 20.94 percent and the beta ratio is 0.43. Stocks from the list have an average debt to equity ratio of 1.98.

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Related Stock Ticker Symbols:

CTL, FE, T, RAI, MO, ETR, SO, PPL, EXC, LO, PCG, SCG, PM, PEG, AEP, LMT

Selected Articles:

· Cheapest Dividend Paying Large Caps As of October 2013

· Dogs Of The Dow Jones: A Compilation Of The Cheapest Stocks From The Index

· 10 Large Cap Dividend Stocks Close To New 52-Week Highs And A Single P/E Multiple

· 16 Dividend Aristocrats With Cheap Forward P/E’s

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