4/17/2013

12 Really Cheap Stocks With Extraordinary High Yields - Over 10%

Stocks with very high yields and low price ratios originally published at "long-term-investments.blogspot.com". A good cash return on your in investment is the basis for all dividend investors who want to build up a passive income stream.

If you are focused on low yielding stocks with a yield around the one percent mark, I can tell you that you won’t get a bigger cash return if you have only a few shares. You need higher yielding stocks with a yield of more than five percent or even over 10 percent.

I personally prefer stocks with a yield of 2-3 percent that have a solid growth history and could grow further. In addition, its ever cool when the company has low debt and payout ratios. This gives the company the possibility to hike the next dividends far above the magic 3 percent mark.

However, let’s come back to my daily theme: I like to show the highest yielding stocks with a P/E of less than 15 and a market capitalization over USD 2 billion. Twelve companies fulfilled these criteria of which eight are recommended to buy. Pitney Bowes is the star below the results. Its yield is still over 10 percent but the stock gained nearly 40 percent this year. PBI fights with a changing business environment and investors are more confident about the success of this battle.

These are the results with low debt ratios:
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Prospect Capital (NASDAQ:PSEC) has a market capitalization of $2.36 billion. The company employs people, generates revenue of $320.91 million and has a net income of $190.90 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $225.22 million. The EBITDA margin is 70.18 percent (the operating margin is 58.17 percent and the net profit margin 59.49 percent).


Financial Analysis: The total debt represents 29.45 percent of the company’s assets and the total debt in relation to the equity amounts to 43.93 percent. Due to the financial situation, a return on equity of 14.54 percent was realized. Twelve trailing months earnings per share reached a value of $1.39. Last fiscal year, the company paid $1.22 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 7.51, the P/S ratio is 7.35 and the P/B ratio is finally 0.97. The dividend yield amounts to 12.62 percent and the beta ratio has a value of 0.87.

Long-Term Stock Price Chart Of Prospect Capital (PSEC)
Long-Term Dividend Payment History of Prospect Capital (PSEC)
Long-Term Dividend Yield History of Prospect Capital (PSEC)

Invesco Mortgage (NYSE:IVR) has a market capitalization of $2.77 billion. The company employs people, generates revenue of $566.83 million and has a net income of $344.01 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $288.62 million. The EBITDA margin is 50.92 percent (the operating margin is 60.69 percent and the net profit margin 60.69 percent).

Financial Analysis: The total debt represents 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 15.50 percent was realized. Twelve trailing months earnings per share reached a value of $2.86. Last fiscal year, the company paid $2.60 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 7.22, the P/S ratio is 4.89 and the P/B ratio is finally 0.99. The dividend yield amounts to 12.60 percent and the beta ratio has a value of 0.79.

Long-Term Stock Price Chart Of Invesco Mortgage (IVR)
Long-Term Dividend Payment History of Invesco Mortgage (IVR)
Long-Term Dividend Yield History of Invesco Mortgage (IVR)

CYS Investments (NYSE:CYS) has a market capitalization of $2.08 billion. The company employs 16 people, generates revenue of $293.33 million and has a net income of $372.79 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $228.68 million. The EBITDA margin is 77.96 percent (the operating margin is 77.96 percent and the net profit margin 127.09 percent).

Financial Analysis: The total debt represents 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 21.64 percent was realized. Twelve trailing months earnings per share reached a value of $2.75. Last fiscal year, the company paid $1.85 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 4.33, the P/S ratio is 7.08 and the P/B ratio is finally 0.89. The dividend yield amounts to 10.77 percent and the beta ratio has a value of 0.22.

Long-Term Stock Price Chart Of CYS Investments (CYS)
Long-Term Dividend Payment History of CYS Investments (CYS)
Long-Term Dividend Yield History of CYS Investments (CYS)


Take a closer look at the full list of cheap stocks with unbelievable high yields. The average P/E ratio amounts to 8.04 and forward P/E ratio is 8.29. The dividend yield has a value of 13.56 percent. Price to book ratio is 3.25 and price to sales ratio 4.92. The operating margin amounts to 32.28 percent and the beta ratio is 0.53. Stocks from the list have an average debt to equity ratio of 6.39.

Here is the full table with some fundamentals (TTM):

12 Cheap Stocks With Very High Yields (Click to enlarge)

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Related stock ticker symbols:
VIP, APO, AGNC, KKR, ARR, PSEC, IVR, NLY, TWO, CYS, PBI, HTS

Selected Articles:

*I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

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