It seems that every story you read about these days is geared toward day traders or those looking for long-term growth in retirement portfolios. But there are millions of investors who need or want current income, and low interest rates have made that strategy largely a losing one. Some of us developed to yield seekers, looking for cheap and high yielding stocks
I’m not talking about a yield income of 1 or 2 percent yearly. No, that’s boring. I’m talking about a 2.5 percent yield per quarter or a sum of 10% or more per year.
Attached you can find a selection of stocks with yields over 10 percent. The valuation of the selected stocks is cheap with a forward P/E of less than 10.
Most of the 14 results are off mainstream: Asset Managers, Oil & Gas Refining & Marketing, REITs and finally Telecoms are the main groups that pay those big dividends while having a cheap valuation.
Are they cheap for a reason or a bargain?
The market is always looking forward, so that fact that those stocks are trading below their book value suggests investors expect the companies to underperform. While there are several reasons why this is could be the case, one of the most apparent is tighter spreads.