MSFT, BP, INTC, CVX Among Our 10 Cheap Dividend Stocks Loved by the Hedge Fund Industry

Intel Corporation (NASDAQ:INTC) trades at one of the lowest P/E ratios in the semiconductor industry at 8.5x. Intel also has one of the highest dividend yields at 4.6%. Intel has been pressured of late—down almost 20% year to date—due to a hastening decline in PC sales. Future growth, though, should be driven by data center demand and emerging market expansion—where EM currently account for around 66% of PC sales. Expected to grow at 12% over the next five years, Intel is one of the best ‘growth at a reasonable price’ opportunities in the industry with a PEG ratio of 0.8. Even including non-dividend payers, Intel is one of the top ten stocks loved by the hedge fund industry, with 44 funds holding interest.

Chevron Corporation (NYSE:CVX) is another energy stock that makes this list, with 43 funds holding interest at the end of last quarter. Chevron has experienced various new developments of late, notably its liquid natural gas projects in Australia and Asia. Production between 2012 and 2014 is expected to grow by just 1% a year, though 5% growth is forecasted for 2014-2017. Driving this eventual surge in production will be Chevron’s restructuring of downstream operations, making the energy company smaller and less complex. A larger focus on upstream projects will increase margins quite significantly, while LNG operations will drive revenue growth. Chevron pays a solid dividend that yields 3.4% and has a P/E of only 8.7x.

Here is a list of all 10 cheap dividend-paying stocks loved by hedge funds during the third quarter:

We believe that Microsoft offers some of the best value in the tech industry with a variety of products and markets, notably its new operating system Windows 8 and Windows Mobile operating system. The tech giant Intel is one of the cheapest in the industry with one of the highest dividend yields. With gold prices expected to appreciate on the back of the Fed’s commitment to keep rates low through 2015, Freeport should see solid appreciation over the next few years. BP and Chevron also look to perform well over the interim on solid growth opportunities in natural gas and increased energy consumption.

Related tickers: Walgreen Company (NYSE:WAG), ConocoPhillips (NYSE:COP), Eli Lilly & Co. (NYSE:LLY), General Dynamics Corporation (NYSE:GD), Lockheed Martin Corporation (NYSE:LMT).