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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. We compiled a list of 15 companies with low PE ratios that also pay fat dividend checks regularly. All companies in this list have a market capitalization above $500 million, P/E ratio lower than 12 and dividend yield of at least 3.4%. These 15 stocks returned 21% (including dividends) during the past 12 months beating government bonds by a large margin.

Stock

Yield

(%)

Recent Price (NYSEARCA:USD)

Dividend (USD)

2008

2009

2010

1. Alliance Resource Partners, LP (NASDAQ:ARLP):

4.4%

82.4

2.53

2.95

3.21

2. Exelon Corporation (NYSE:EXC):

5.1%

42.2

2.03

2.10

2.10

3.Lockheed Martin (NYSE:LMT):

3.8%

79.3

1.83

2.34

2.64

4. Maiden Holdings (NASDAQ:MHLD):

3.8%

7.5

0.16

0.25

0.27

5. NextEra Energy, Inc. (NYSE:NEE):

3.9%

56.6

1.78

1.89

2.00

6. NL Industries, Inc. (NYSE:NL):

3.5%

14.2

0.50

0.50

0.50

7. Pioneer Southwest Energy Partners LP (PSE):

5.6%

35.5

0.81

2.00

2.00

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

5.6%

31.1

1.60

1.64

1.68

9. Brookfield Infrastructure Partners (NYSE:BIP):

5.1%

23.5

0.88

1.06

1.10

10. Dominion Resources (NYSE:D):

4.3%

46.4

1.58

1.75

1.83

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

5.6%

37

1.88

1.96

1.96

12. Entergy Corp (NYSE:ETR):

4.8%

69.7

3.00

3.00

3.24

13. Hudson City Bancorp, Inc. (NASDAQ:HCBK):

3.4%

9.5

0.45

0.59

0.60

14. Sunoco Logistics (NYSE:SXL):

5.2%

90

3.67

4.11

4.52

15. Universal Corp (NYSE:UVV):

4.5%

43.4

1.80

1.84

1.88


1. Alliance Resource Partners, LP (ARLP): Alliance Resource Partners, L.P. provides production and marketing of coal in the United States. ARLP recently traded at $82.4 and has a 4.4% dividend yield. ARLP gained 80.5% during the past 12 months. The stock has a market cap of $3.03 billion and P/E ratio of 11.6.

2. Exelon Corporation (EXC): Exelon Corporation is a utility services holding company that provides generation, transmission, distribution and sale of electricity in northern Illinois. EXC recently traded at $42.2 and has a 5.1% dividend yield. EXC gained 1.7% during the past 12 months. The stock has a market cap of $27.91 billion and P/E ratio of 10.9. Exelon is also one of the 35 Growing Dividend Stocks with Low PE Ratios.

3. Lockheed Martin Corporation (LMT): Lockheed Martin Corporation provides advanced technology systems and products in the United States and internationally. LMT recently traded at $79.3 and has a 3.8% dividend yield. LMT lost 3.1% during the past 12 months. The stock has a market cap of $27.72 billion and P/E ratio of 10. Jim Simons’ Renaissance and Ron Gutfleish’s Elm Ridge had more than $100 Million each in LMT at the end of December.

4. Maiden Holdings, Ltd. (MHLD): Maiden Holdings Ltd. provides non-catastrophe inland marine and property coverage reinsurance solutions in the United States and Europe. MHLD recently traded at $7.5 and has a 3.8% dividend yield. MHLD gained 3.2% during the past 12 months. The stock has a market cap of $537 million and P/E ratio of 7.6.

5. NextEra Energy, Inc. (NEE): NextEra Energy, Inc. provides generation, transmission, distribution and sale of electric energy in the United States and Canada. NEE recently traded at $56.6 and has a 3.9% dividend yield. NEE gained 13% during the past 12 months. The stock has a market cap of $23.81 billion and P/E ratio of 11.9. NEE is also one of the 35 Growing Dividend Stocks with Low PE Ratios.

6. NL Industries, Inc. (NL): NL Industries, Inc. is a component products industry firm operating primarily in the United States, Canada, and Taiwan. NL recently traded at $14.2 and has a 3.5% dividend yield. NL gained 76.9% during the past 12 months. The stock has a market cap of $693 million and P/E ratio of 10.2.

7. Pioneer Southwest Energy Partners LP (PSE): Pioneer Southwest Energy Partners L.P. provides ownership and acquisition of oil and natural gas properties in the United States. PSE recently traded at $35.5 and has a 5.6% dividend yield. PSE gained 55.6% during the past 12 months. The stock has a market cap of $1.18 billion and P/E ratio of 11.1.

8. 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. T recently traded at $31.1 and has a 5.6% dividend yield. T gained 26.9% during the past 12 months. The stock has a market cap of $183.96 billion and P/E ratio of 9.3.

9. Brookfield Infrastructure Partners LP (BIP): Brookfield Infrastructure Partners L.P. operates in the utilities, transport and energy, and timber sectors. BIP recently traded at $23.5 and has a 5.1% dividend yield. BIP gained 41.5% during the past 12 months. The stock has a market cap of $2.81 billion and P/E ratio of 5.5. Value investor Mohnish Pabrai and Richard Perry’s Perry Capital added Brookfield Infrastructure Partners (BIP) to their portfolios during the last quarter of 2010.

10. 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 $46.4 and has a 4.3% dividend yield. D gained 14.7% during the past 12 months. The stock has a market cap of $26.96 billion and P/E ratio of 9.8.

11. Eli Lilly & Co. (LLY): Eli Lilly provides pharmaceutical products worldwide. LLY recently traded at $37 and has a 5.6% dividend yield. LLY gained 11.8% during the past 12 months. The stock has a market cap of $40.8 billion and P/E ratio of 8.4.

12. 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 $69.7 and has a 4.8% dividend yield. ETR lost 10.4% during the past 12 months. The stock has a market cap of $12.48 billion and P/E ratio of 10.5. Clint Carlson’s Carlson Capital has the largest position in ETR with $17 Million.

13. Hudson City Bancorp, Inc. (HCBK): Hudson City Bancorp, Inc. provides a range of retail banking services. HCBK recently traded at $9.5 and has a 3.4% dividend yield. HCBK lost 24.8% during the past 12 months. The stock has a market cap of $4.71 billion and P/E ratio of 8.8. HCBK is one of the 20 stocks Wall Street analysts expect to fall the most in January. They were right.

14. Sunoco Logistics Partners LP (SXL): Sunoco Logistics Partners L.P. provides transport and storage of refined products and crude oil in the United States. SXL recently traded at $90 and has a 5.2% dividend yield. SXL gained 39.7% during the past 12 months. The stock has a market cap of $2.98 billion and P/E ratio of 9.6.

15. Universal Corporation (UVV): Universal Corporation is a leaf tobacco merchant and processor worldwide. UVV recently traded at $43.4 and has a 4.5% dividend yield. UVV lost 12.3% during the past 12 months. The stock has a market cap of $1.02 billion and P/E ratio of 8.1.

Disclosure: I am long T.

Source: 15 Special Dividend Stocks With Low PE Ratios and Excellent Track Records