5 Low P/E Stocks Paying Steady Dividends

5 Low P/E Stocks Paying Steady Dividends

One of the benefits of this year’s stock market sell-off is that investors can identify many value stocks based on the most basic of metrics. This is different than identifying growth stocks which often involves the acceptance of a narrative (”virtual reality is the next big thing”).

These 5 stocks could be considered “cheap” based on the methods explained by Benjamin Graham in his classic on the subject, The Intelligent Investor. They could get cheaper, of course. Screening for low price-earnings ratios and a history of making dividend payments leads to a few value stocks, such as:

Citizens Financial Group

CFG
Inc
(NYSE: CFG) is a regional bank with headquarters in Providence, Rhode Island.

The stock is trading at 84% of its book value with a price-earnings ratio of 9. This year’s earnings are up by 132% and the past 5-year growth record is 21.30%. The amount of long-term debt is greatly exceeded by shareholder equity. Citizens Financial Group pays a 4.43% dividend.

Foot Locker
FL
(NYSE: FL) is headquartered in New York and makes and markets footwear and related products.

The stock’s price-earnings ratio of 6.49 is well below that of the S&P 500 p/e which now sits at 19.71. Trading at a 7% discount to book value, Foot Locker’s shareholder equity is much greater than its long-term debt. The past 5-year EPS growth is 11.80% and earnings this year grew at 179%. Analysts are not expecting that kind of growth to continue over the next year or so. The dividend at this price is 5.04%.

Lennar Corp (NYSE: LEN) is based in Miami, Florida and builds homes.

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The residential construction business is suffering from much higher mortgage rates and investors have been selling this sector. Lennar is all the way down to a price-earnings ratio of 4 and trades at just 92% of its book value. This year’s earnings are good with an increase of 81% but analysts see much lower figures in the near future. Shareholder equity is much greater than long-term debt. The company pays a dividend of 2.04%.

New York Community Bancorp

NYCB
(NYSE: NYCB) is based in New York City with 230 branch offices branches in 5 states.

The regional bank is available for purchase at a 2% discount from book value and with a price-earnings ratio of just 6.76. Earnings this year are up by 37%. The earnings record for the past 5 years shows growth of 3.40%. Shareholder equity is much greater than long-term debt. New York Community Bancorp is paying an 8.01% dividend.

PacWest Bancorp (NASDAQ
NDAQ
: PACW) is headquartered in Los Angeles with 69 branches in California, one in Durham, North Carolina and one in Denver, Colorado.

The stock is trading with a price-earnings ratio of 5 and at a 26% discount to its book value. Earnings this year increased by 148% and the past 5-year EPS growth is 12%. Analysts are not expecting growth over the next 12 months, a factor that seems to be priced in, at least somewhat. This is another one where the shareholder equity exceeds the long-term debt on the books. PacWest pays a 4.55% dividend

There is no guarantee that investments in these types of stocks will be profitable. It’s a method that a long history of some success for those who practice it. These are ideas for those with longer-term time frames and are not appropriate for those who simply trade in and out.

Not investment advice. For educational purposes only.

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