3 Cheap Large Cap Dividend Stocks With 25% Discount

With the broader markets at or near all-time highs, there are a lot of analysts who will bemoan that there aren't any cheap investments out there to be had. An even bigger complaint is that investors can't find decent yields from investments because of fed interest rates.

When stocks fall more than 25% from their highs, they can indicate trouble. On the other hand, they can also be buying opportunities.

For these large-cap companies that have economic moats and are at least investment grade if not A-grade, we can lean towards the side that they are more likely bargains at the current lower valuations than trouble. This means they have a good chance of being winners when the companies recover.

Here are the stocks I'm talking about...

The Cheapest Stocks On Deutsche Bank’s List Of The 30 S&P 500 Constituents

Attached you can find a great list from Deutsche Bank. It's a very detailed list with P/E's, EPS growth, yield and buyback yield.

All of the qualifying companies have a market capitalization > $10 billion, trade at a 2015 P/E of less than 22 and are expected to report positive earnings growth this year.

Also, Deutsche Bank’s equity research team has calculated a Net Buyback Yield for each of its 30 stock picks (trailing 12-month buyback expenditures less option exercise proceeds and less stock option expense / Market Cap).

The cheapest stocks on Deutsche Bank’s list of the 30 S&P 500 stocks to buy are Bank of America Corp (2015 P/E of 12.6), JPMorgan Chase & Co (11.3), SunTrust Banks Inc (12.3), Ameriprise Financial Inc (12.4), Mylan Inc (11.9), American Airlines Group Inc (4.7), United Continental Holdings Inc (4.9) and Exelon Corp (11.3).

My top picks are...

Software Giant Microsoft Is The New Stock Buy For My Passive Income Portfolio

Past Friday, I purchased shares of the software giant Microsoft. The company has a P/E of 13.08 which should fall to a ratio of 11.32 by next year. Earnings growth of 8.7 percent for the next five years is forecasted by analysts.

Microsoft announced recently to raise their future dividends by 22 percent and buy back $40 billion in own shares. This should drive trading volume into the stock. The expected dividend yield is 3.31 percent.

I believe that the microsoft stock has still potential to grow dividends in the future. Despite the weakness with the implementation of new technologies, Microsoft is still a growth stock. Sales more than doubled within the past decade and earnings increased by a factor of 2.5x. That's pretty good for the company with $77 billion cash and $12.6 billion long-term debt.

However, I put 40 shares at $33.88 into the Dividend Yield Passive Income Portfolio. The total purchase amount resulted in $1,360 which should bring additional $45 in yearly dividends.

Latest Portfolio Transactions (Click to enlarge)

Portfolio Overview I (Click to enlarge)

Portfolio Overview I (Click to enlarge)

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For readers who are new to the matter and my dividend growth philosophy: I funded a virtual portfolio with 100k on October 04, 2012 with the aim to build a passive income stream that doubles each five to ten years. I plan to purchase each week one stock holding until the money is fully invested. The total number of constituents is expected at 50 – 70 companies and the dividend income should be at least at $3,000 per year.

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Over the full year, the expected dividend income amounts to $2,485. With around $27,400 in deposited cash, it’s still possible to reach the $3,000 by the end of this year.

Portfolio Performance (Click to enlarge)

The full portfolio holdings are up 6.23 percent in average. Due to the high cash amount and slow buying process in a gaining market, the complete portfolio performance is only 5.85 percent.

Here is the income perspective of the portfolio

Sym	Name	P/E Ratio	Dividend Yield	Buy	# Shrs	Income	Value
TRI	Thomson Reuters C	26.32	3.75	28.90	50	$64.75	$1,725.50
LMT	Lockheed Martin C	13.78	3.75	92.72	20	$92.00	$2,450.00
INTC	Intel Corporation	12.21	3.98	21.27	50	$45.00	$1,140.50
MCD	McDonald's Corpor	17.33	3.25	87.33	15	$46.20	$1,420.50
WU	Western Union Com	11.77	2.68	11.95	100	$50.00	$1,878.00
PM	Philip Morris Int	17	4.03	85.42	20	$70.58	$1,740.80
JNJ	Johnson & Johnson	19.22	2.93	69.19	20	$50.80	$1,746.20
MO	Altria Group Inc	15.86	5.19	33.48	40	$72.00	$1,386.00
SYY	Sysco Corporation	18.9	3.55	31.65	40	$44.80	$1,268.80
DRI	Darden Restaurant	16.32	3.37	46.66	30	$46.50	$1,401.60
CA	CA Inc.	12.77	3.42	21.86	50	$50.00	$1,478.50
PG	Procter & Gamble	19.65	3.07	68.72	25	$58.20	$1,900.50
KRFT	Kraft Foods Group	17.17	3.76	44.41	40	$80.00	$2,128.80
MAT	Mattel Inc.	18.93	3.3	36.45	40	$55.60	$1,702.00
PEP	Pepsico Inc. Com	18.71	2.78	70.88	20	$44.20	$1,592.40
KMB	Kimberly-Clark Co	20.08	3.36	86.82	15	$47.55	$1,413.90
COP	ConocoPhillips Co	11.7	3.81	61.06	20	$52.80	$1,419.40
GIS	General Mills In	17.85	2.18	42.13	30	$31.20	$1,438.50
UL	Unilever PLC Comm	18.06	3.5	39.65	35	$47.01	$1,334.55
NSRGY	NESTLE SA REG SHR	19.1	3.15	68.69	30	$65.31	$2,058.00
GE	General Electric	17.84	3.15	23.39	65	$49.40	$1,563.25
ADP	Automatic Data Pr	24.64	2.45	61.65	25	$43.50	$1,788.00
K	Kellogg Company C	22.56	3.02	61.52	25	$44.50	$1,484.00
KO	Coca-Cola Company	19.57	2.95	38.83	40	$43.80	$1,488.00
RTN	Raytheon Company	12.94	2.87	57.04	20	$43.00	$1,485.00
RCI	Rogers Communicat	11.39	3.97	46.5	50	$84.00	$2,150.00
GPC	Genuine Parts Com	17.87	2.65	77.06	20	$42.12	$1,613.00
TSCDY	TESCO PLC SPONS A	N/A	3.87	17.08	110	$75.68	$1,931.60
APD	Air Products and	22.5	2.63	85.71	15	$41.55	$1,594.65
GSK	GlaxoSmithKline P	19.35	4.66	52.16	30	$71.13	$1,503.30
WMT	Wal-Mart Stores	14.24	2.47	79.25	20	$36.16	$1,456.00
BTI	British American	15.78	4.05	111.13	23	$96.14	$2,363.71
CHL	China Mobile Limi	10.81	4.06	55.32	25	$55.95	$1,373.75
MMM	3M Company Common	18.56	2.1	110.27	15	$37.43	$1,791.00
TUP	Tupperware Brands	18.61	2.56	80.98	15	$33.30	$1,313.40
IBM	International Bus	13.05	1.96	197.09	16	$57.60	$2,945.60
HAS	Hasbro Inc.	18.99	3.24	44.09	30	$45.60	$1,422.90
T	AT&T Inc.	25.76	4.01	34.47	30	$40.50	$1,012.50
WAG	Walgreen Co. Comm	21.86	2.04	44.25	30	$34.20	$1,673.70
AFL	AFLAC Incorporate	8.74	2.23	59.39	20	$28.00	$1,274.60
TGT	Target Corporatio	15.29	2.38	68.69	32	$48.32	$2,029.12
CSCO	Cisco Systems In	12.37	2.83	25.12	90	$58.50	$2,071.80
DE	Deere & Company C	9.42	2.42	84.11	15	$29.85	$1,238.25
RGR	Sturm Ruger & Co	13.77	2.96	51.65	20	$38.52	$1,301.40
LO	Lorillard Inc Co	14.17	4.77	42.3	30	$65.00	$1,347.90
UNP	Union Pacific Cor	17.69	1.84	154.75	8	$22.88	$1,231.20
IDA	IDACORP Inc. Com	12.83	3.17	47.94	20	$30.40	$962.80
BAX	Baxter Internatio	16.08	2.92	66.38	20	$37.60	$1,300.20
MSFT	Microsoft Corpora	13.12	2.72	33.88	40	$36.80	$1,355.20
						$2,485.92	$78,690.28
						Average Yield	3.16%
						Yield On Cost	3.37%