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About half of the 3,000 companies included in the Russell 3000 index pay dividends. Of those, 924 of them have a dividend yield greater than 2% and 362 have a yield over 4%.

In my previous articles (here and here), I analyzed five stocks that have the highest dividend yields among the large-cap and mid-cap stocks. In this article, I have tried to find out if the five stocks that have the highest dividend yield among the stocks included in the Russell 3000 index are bargains right now.

Russell 3000 Index

Russell investment explanation:

The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000 Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected.

In this article, I will give the corresponding fundamental parameters for these five companies and my own opinion about them. Nonetheless, these data and my opinion should only serve as a basis for further research. All the data for this article were taken from Yahoo Finance and Finviz.com on Jan. 11, 2013, after the market close.

The table and chart below present the top five highest dividend yielders, their forward annual dividend rates, their forward yields, their payout ratios, and their dividend growth rates for the past five years.

Click to enlarge images.

1. Arlington Asset Investment Corp. (NYSE:AI)

Arlington Asset Investment Corp., an investment firm, acquires mortgage-related and other assets. The company acquires on a leveraged basis residential mortgage-backed securities that are issued by the United States government agency, guaranteed as to principal and interest by U.S. government agencies, or U.S. government-sponsored entities.

Arlington Asset Investment has a very low trailing P/E of 8.02 and even a lower forward P/E of 5.42. The forward annual dividend yield is very high at 15.64% and the payout ratio is at 125%. The annual rate of dividend growth over the past five years was negative at -2.5%.

AI has a total cash $1.29 billion. It is expected to post a profit of $4.22 a share in the current year and $4.13 in 2013, which should be enough to sustain dividend payments of $3.50.

The AI stock is trading 5.08% above its 20-day simple moving average, 8.07% above its 50-day simple moving average, and 7.22% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

The cheap valuation, the very rich dividend, and fact that the stock is in an uptrend are all factors that make AI stock quite attractive.

2. BGC Partners, Inc. (NASDAQ:BGCP)

BGC Partners, Inc. operates as a brokerage company, primarily servicing the wholesale financial markets. BGC Partners has a very low forward P/E of 5.42 and the price/sales ratio is very low at 0.32. The average annual earnings growth for the past five years was very high at 29.39% and the average annual earnings growth estimates for the next five years is quite high at 12.50%.

The forward annual dividend yield is very high at 13.83%. The annual rate of dividend growth over the past five years was negative at -1.9% and the payout ratio is at 700%. BGCP has a total cash per share of $2.32. It is expected to post a profit of $0.60 a share in the current year and $0.64 in the next year, which should be enough to sustain dividend payments of $0.48.

BGCP stock is trading 51.81% below its 52-week high, and has 50% upside potential based on the consensus mean target price of $5.23. The cheap valuation metrics, the very rich dividend, and the 50% upside potential based on the consensus mean target price of $5.23 are all factors that make BGCP stock quite attractive.

3. Cellcom Israel Ltd. (NYSE:CEL)

Cellcom Israel Ltd. provides cellular communications services in Israel. It offers basic and advanced cellular telephone services, text and multimedia messaging services, and advanced cellular content and data services.

Cellcom has a very low trailing P/E of 6.10 and even a lower forward P/E of 2.04. The PEG ratio is also very low at 0.67. The forward annual dividend yield is very high at 12.58%. The annual rate of dividend growth over the past five years was negative at -7.3% and the payout ratio is only 39.8%.

CEL has a total cash per share of $4.29. It is expected to post a profit of $4.67 a share in the current year and $3.98 in 2013, which should be enough to sustain dividend payments of $1.02.

The cheap valuation, the very rich dividend, and the low payout ratio are all factors that make CEL stock quite attractive.

4. Mesabi Trust (NYSE:MSB)

Mesabi Trust operates as a royalty trust in the United States. The company produces iron ore pellets.

Mesabi Trust has no debt at all and a very low trailing P/E of 11.08. The forward annual dividend yield is quite high at 16.65% and the payout ratio is at 106%. The annual rate of dividend growth over the past five years was at 18.7%.

MSB has a total cash per share of $1.16. It is expected to post a profit of $2.39 a share in the current year and $1.51 in the next year, which would not be enough to sustain dividend payments of $4.52.

The MSB stock is trading 6.97% above its 20-day simple moving average, 10.58% above its 50-day simple moving average, and 6.01% above its 200-day simple moving average, which indicates a short-term, mid-term and long-term uptrend.

5. Nordic American Tankers Limited (NYSE:NAT)

Nordic American Tankers Limited, an international tanker company, owns and operates double hull crude oil tankers. Nordic American Tankers has a very low debt (total debt to equity is only 0.29), and the current ratio is very high at 11.20. The forward annual dividend yield is very high at 13.11%, and the annual rate of dividend growth over the past five years was negative at -5.6%.

NAT has a total cash per share of $1.62. It is expected to post a loss of $1.10 a share in the current year and a loss of $0.86 in 2013, which would not be enough to sustain dividend payments of $1.20.

Source: 5 Russell 3000 Top Dividend Yielders - Are They Bargain Stocks Now?