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After a market correction that took down almost every stock, even many dividend stocks are oversold now, and the market is providing an excellent entry point with dividend stocks for long term investors. The market correction over the last couple weeks has shown how important it is to have stocks that pay a solid dividend, because at least you get paid a dividend while you wait for a market rebound. Most dividend stocks fared better in the latest correction when compared to stocks that pay little or no dividends. Here are 6 cheap stocks to consider in order to build a high yield portfolio (an equal weighting in these stocks would provide a yield that averages about 11%):

Chimera Investment Corporation (CIM) is a real estate investment trust (REIT) that invests in residential mortgage-backed securities, and both commercial and residential mortgage loans. With a 16% yield and a share price below book value, this looks like a great buying opportunity.

Here are some key points for CIM:

  • Current share price: $3.04
  • The 52 week range is $2.62 to $4.36
  • Earnings estimates for 2011: 60 cents per share
  • Earnings estimates for 2012: 59 cents per share
  • Annual dividend: 52 cents per share which yields 16%
  • Book value: $3.45 per share

PDLI Biopharma, Inc. (PDLI) owns and manages patents that are licensed by biotech and pharmaceutical companies. This company receives revenues from the licensing agreements and uses some of that money to pay a very generous dividend to shareholders. The earnings estimates easily covers the dividend payout so it is possible that the dividend could rise in the future.

Here are some key points for PDLI:

  • Current share price: $5.93
  • The 52 week range is $4.66 to $6.75
  • Earnings estimates for 2011: $1.16 per share
  • Earnings estimates for 2012: $1.36 per share
  • Annual dividend: 60 cents per share which yields 10.4%

Compass Diversified Holding (CODI) invests in small to mid-sized companies. Compass recently agreed to acquire Camelbak and already has companies like Staff Mark, Liberty Safe, Ergo Baby Carrier and others in its investment portfolio. This stock was trading around $16 in July and is now providing investors with a great yield and entry point.

Here are some key points for CODI:

  • Current share price: $13.59
  • The 52 week range is $11.21 to $18.58
  • Earnings estimates for 2011: $1.80 per share
  • Earnings estimates for 2012: $1.89 per share
  • Annual dividend: $1.44 per share which yields 11.1%

Windstream Corporation (WIN) provides communications services (primarily to rural areas), such as local and long distance, Internet access, data services, and video services. This is also one of the top yielding stocks in the market and has recently dipped, which has created a solid buying opportunity. The chairman and CEO recently bought over $200,000 worth of stock. See that insider buying here.

Here are some key points for WIN:

  • Current share price: $12.28
  • The 52 week range is $10.76 to $14.40.
  • Earnings estimates for 2011: 77 cents per share
  • Earnings estimates for 2012: 85 cents per share
  • Annual dividend: $1 per share which yields 8.3%

Frontier Communications (FTR) provides communications services, such as local and long distance, Internet access, data services, and video services. I would only buy this stock on dips because it looks like the least attractive stock here.

Here are some key points for FTR:

  • Current share price: $7.36
  • The 52 week range is $6.29 to $9.84
  • Earnings estimates for 2011: 27 cents
  • Earnings estimates for 2012: 32 cents
  • Annual dividend: 75 cents per share which yields 10.2%

Nutrisystems, Inc. (NTRI) provides weight loss programs and food to men and women. This stock is well off the 52 week high which was about $22.64 and could be a strong rebound play. Nutrisystems reported disappointing earnings early this year but with a solid yield of nearly 6%, this stock could be set to rebound later this year.

Here are some key points for NTRI:

  • Current share price: $12.76
  • The 52 week range is $11.40 to $22.64
  • Earnings estimates for 2011: 66 cents per share
  • Earnings estimates for 2012: $1.08 per share
  • Annual dividend: 70 cents per share which yields 5.8%
  • Book value: $2.87 per share

Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: A Portfolio That Yields About 11% With 6 Low Priced Stocks