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In our recent study we have shown that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. The dividend stocks beat the overall market by an average of 1.36% per year during this period. We prepared a list of 4 large cap companies with low P/E ratios and high dividend yields. All companies in this list have a market capitalization above $10 billion, P/E ratio lower than 10, and dividend yield of at least 4%.

Stock

Market Cap

Current Price (USD)

P/E

Yield

(%)

Dividend (USD)

2008

2009

2010

1. AT&T Inc. (NYSE:T)

180.36

30.54

9.49

5.5%

1.60

1.64

1.68

2. Dominion Res. (NYSE:D)

26.01

44.95

8.94

4.1%

1.58

1.75

1.83

3. Eli Lilly & Co. (NYSE:LLY)

41.29

35.93

7.78

5.5%

1.88

1.96

1.96

4.Entergy Corp (NYSE:ETR)

11.88

66.65

9.99

4.9%

3.00

3.00

3.24

AT&T Inc. (T): AT&T Inc. is one of the leading telecommunication companies, delivering voice service in more than 220 countries and data service in 200 countries. Fortune magazine selected AT&T as one of the 50 “World’s Most Admired Companies” in 2010.

Last week AT&T Inc. announced that it has been recognized in two Gartner Inc.'s Magic Quadrants. These magic quadrants include Magic Quadrants for Global Network Service Providers and Pan-European Network Service Providers. Gartner evaluates companies according to their completeness of vision and ability to execute.

T recently traded at $30.54 and has a 5.5% dividend yield. T gained 24.83% during the past 12 months. The stock has a market cap of $181 billion and P/E ratio of 9.49. In fiscal 2010, AT&T reported total revenue of $124 billion, an increase of 1.4% compared with a year ago.

Dominion Resources, Inc. (D): Dominion Resources produces and transports energy in the United States. Dominion's portfolio includes approximately 27,600 megawatts of energy generation. D recently traded at $44.95 and has a 4.1% dividend yield. D gained 11.3% during the past 12 months. The stock has a market cap of $26 billion and P/E ratio of 8.94. In fiscal 2010, D reported total revenue of $15.2 billion, an increase of 2.7% compared with a year ago. According to recent forecasts, the company is expecting $3 to $3.3 operating EPS in 2011. D is also one of the 35 Growing Dividend Stocks with Low PE Ratios.

Eli Lilly & Co. (LLY): Eli Lilly provides pharmaceutical products worldwide. LLY recently traded at $35.93 and has a 5.5% dividend yield. LLY gained 5% during the past 12 months. The stock has a market cap of $41.29 billion and P/E ratio of 7.78. LLY reported total revenue of $23.1 billion, an increase of 5.6% compared with a year ago. Eli Lilly will announce its first quarter financial results on April 18, 2011. Recently Lilly has made an unconditional offer to acquire the animal health business of Janssen Pharmaceutica NV.

Entergy Corporation (ETR): Entergy Corporation is an integrated energy company, which owns and operates power plants with approximately 30,000 megawatts of electric generating capacity. Entergy Corporation is also the second-largest nuclear generator in the United States. ETR recently traded at $66.65 and has a 4.9% dividend yield. ETR lost 15.7% during the past 12 months. The stock has a market cap of $11.88 billion and P/E ratio of 9.99. ETR reported total revenue of $11.5 billion, an increase of 7% compared with a year ago. Entergy Corporation has announced its quarterly dividend will amount to 83 cents per common share and will be paid on June 1, 2011.

Disclosure: I am long T.

Source: 4 Special Dividend Stocks With Low PE Ratios and Excellent Track Records