4 Bargain-Priced Dividend Stocks Near 52-Week Lows

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.

We track the quarterly moves of Buffett and over 600 other leading hedge fund managers to deliver our market-beating “Best Performing Hedge Funds Strategy”, which gained 4% last quarter vs. a loss of 1% for the S&P 500 ETF (SPY), and a further 7.6% so far in the second-quarter compared to a 0.9% loss for the SPY. Since its inception in May 2014 this strategy, which invests in the consensus picks of the top 100 best performing hedge funds every quarter, has returned 87.8% vs. 53.3% for the SPY. You can see our latest picks by trying our newsletters free of charge for 14 days.

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.

Altria Group Inc. (NYSE:MO) & Philip Morris International Inc. (NYSE:PM)

Tobacco stocks Altria Group Inc. (NYSE:MO) & Philip Morris International Inc. (NYSE:PM) have both been beaten up over the last year, as cigarette sales continue to slide. Even worse, sales of Philip Morris’ iQOS smokeless tobacco device recently hit a wall in Japan, where they had quickly gobbled up 10% market share. That has raised questions as to whether their ceiling is as high as once hoped.

Philip Morris’ CEO has stated that the company would like to stop selling traditional cigarettes completely in the future. With those products still accounting for over 87% of the company’s revenue last year, there needs to be a huge shift in consumer preferences before that becomes viable, a shift which appears to have stalled in Japan.

While the news isn’t all good, Altria Group Inc. (NYSE:MO) and Philip Morris International Inc. (NYSE:PM) are still revenue and earnings juggernauts with fair valuations and generous dividend yields of 5.09% and 5.29% respectively. There’s also a huge potential untapped market for both companies to leverage their scale and distribution capabilities, which is the legal marijuana industry. Altria trades at about half the P/E of Philip Morris, but is more exposed to the U.S market, where tobacco rates are declining more rapidly.

Disclosure: None