Dividend investors love nothing more than to buy shares of their favorite dividend-paying stock at a discount, locking in an impressive yield along with the added upside of potentially grabbing a stock near a low point. With the first five months of 2018 being far more turbulent than anything experienced in 2017, such bargains have become much easier to find. That’s especially true on the dividend stocks front, as rising treasury yields have prompted a flight from income stocks to less-risky bonds.
While buying low is never an easy endeavor, as it usually means going against the prevailing negative sentiment on a stock, it is of course the strategy perfected by many of the world’s leading hedge fund investors, especially legendary value investors like Warren Buffett.
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Below, we’ll take a look at four dividend stocks within mere percentage points of their 52-week lows, all of which currently sport dividends with an annual yield above 4%.
China Mobile Ltd. (ADR) (NYSE:CHL)
China/U.S trade war fears have dragged down China Mobile Ltd. (ADR) (NYSE:CHL)’s shares by 10% in 2018 to within 2% of the stock’s 52-week low. China Mobile’s current yield stands at 4.29%, though the company’s semi-annual dividends do fluctuate regularly based on results (more so than most other dividend stocks), with the company’s payout ratio having consistently remained in the 40% range.
China’s largest mobile carrier with 895 million subscribers as of the end of February also has a horde of net cash on hand, amounting to over $60 billion. While that sounds like a good thing, the fact that it isn’t being spent to help bolster the company with overseas acquisitions has actually served to hurt the stock, as investors fear that the state-run corporation’s war chest could be pilfered by the Chinese government to support other projects.
While margins have contracted recently due to the company’s aggressive work on its 5G network (trials of which will roll out in five cities later this year), those investments will pay huge dividends in the future, with the company’s 5G subscriber base expected to surpass 30 million by next year. Trading at a P/E of 10.3 and an EV/EBITDA multiple of just 2.64, China Mobile Ltd. (ADR) (NYSE:CHL) looks like one of the cheapest utilities plays in the world and an ideal dividend stock to hold for the long-term.
On the next page we’ll look at three other dividend stocks that are currently trading near 52-week lows.