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By Darnell Brown

We should thanks the dividend gods for these 4 stocks.
This article will examine the investment potential of several high yield stocks now selling at attractive valuations relative to peers. Each featured stock has a long history of dividend growth, a high current yield and strong cash flows to protect dividend payments. For income investors seeking relatively safe yields in a very volatile market, consider the names below. As always use the list below as a starting point for your own research.

Intel Corporation (NASDAQ:INTC) Intel has a market cap of $103.44 billion, with a price to earnings ratio of 9.04. The stock has traded in a 52 week price range of between $17.84 and $23.96. The current stock price is $19.70. Intel reported second quarter revenues of $25.9 billion compared to the second quarter of 2010 revenues of $10.8 billion. Second quarter net income was $6.11 billion compared to net income of $2.89 billion in the second quarter of 2010.

One of Intel’s top competitors is Texas Instruments Inc. (NASDAQ:TXN). Texas Instruments is currently trading at $26.08 with a market cap of $30.13 and a price to earnings ratio of 10.04. Texas Instrument pays a dividend that yields 2.0% versus Intel whose dividend yields 4.20%.

Intel has been a highly profitable top tier technology company for many years. However, in recent quarters the company’s earnings have really picked up. In 2010 the company’s net income increased by 163% from 2009. In the second quarter of 2011, earnings increased by 211% from the second quarter of 2010. Over the last three years, earnings per share have increased by 32%. This means that Intel is a high growth company with a high yield dividend. This combination makes the stocks 9.04 price to earnings ratio look cheap. I rate Intel Corporation as a buy.

Annaly Capital Management Inc. (NYSE:NLY) Annaly Capital has a market cap of $17.26 billion, with a price to earnings ratio of 6.62. The stock has been trading in a 52 week price range of between $14.04 and $18.79. The current stock price is $17.81. The company reported second quarter revenues of $304 million compared to revenues of $111 million in the second of 2010. Second quarter net income was $121 million compared to net income of $-223 million in the second quarter of 2010.

One of Annaly Capital’s competitors is Impac Mortgage Holdings Inc. (IMP). Impac Mortgage is currently trading at $2.05 with a market cap of $16.01 million and a price to earnings ratio of 35.34. Impac Mortgage does not pay a dividend.

Annaly Capital offers investors a strong business model and has turned a profit in each of the last five years. In 2010, the company had net income of $1.25 billion. The company has been a good dividend paying company and is currently paying a $2.60 dividend with a monster yield of 14.90%. The company has paid a quarterly dividend since 1997. Annaly Capital is a consistently profitable company that has been able to maintain an extremely generous dividend. With a price to earnings ratio of 6.62, I think the stock is cheap, and I rate Annaly Capital Management Inc. as a buy.

Frontier Communications Corporation (NASDAQ:FTR) Frontier Communications has a market cap of $6.79 billion, with a price to earnings ratio of 41.84. The stock has been trading in a 52 week price range of between $6.29 and $9.84. The current stock price is $6.82. On August 3rd, the company reported second quarter revenues of $1.32 billion, compared to revenues of 516 million in the second quarter of 2010. Second quarter net income was $32.3 million compared to net income of $35.1 million in the second quarter of 2010.

One of Frontier Communications closest competitors is telecommunications provider Century Link Inc. (NYSE:CTL). Century Link is currently trading at $33.07 with a market cap of $19.89 billion and a price to earnings ratio of 16.31. Century Link pays a dividend that yields 8.60% versus Frontier Communications whose dividend yields 10.80%.

Over the last 52 weeks, Frontier Communications has doubled its revenues as a result of its 2010 purchase of Verizon Communications' (VZN) wireline division. The purchase originally had a negative impact on earnings because of integration expenses. However, the integration process has been successful and the company will realize significant cost savings. The primary reason that investors have been attracted to Frontier Communications is because of its high yielding dividend. With the successful integration of the two companies, Frontier Communications has been able to maintain its cash reserves and should be able to sustain its dividend payments. I rate Frontier Communications Corporation as a buy.

Nokia Corporation (NYSE:NOK) Nokia has a market cap of $22.19 billion, with a price to earnings ratio of 12.86. The stock has traded in a 52 week price range of between $4.82 and $11.75. The current stock price is $5.98. On July 21st, the company reported second quarter revenues of $13.4 billion, compared to revenues of $12.3 billion for the second quarter of 2010. Second quarter net income was -534 million compared to net income of $127 million in the second quarter of 2010.

Nokia’s biggest competitor is Apple Inc. (OTC:APPL) Apple is currently trading at $377.48 with a market cap of $349.96 billion and a price to earnings ratio of 14.93. Apple does not pay a dividend.

Nokia has steadily been losing market share to competitors such as Apple and Google Inc. (NASDAQ:GOOG). The company’s three year earnings per share growth rate is -33%. In the third quarter of 2011, the company will be launching a new line of smartphones with a Microsoft operating system. It is hoped that the new product line will make Nokia more competitive. The stock of Nokia needs a competitive boost as it is down by 39.84% over the last 52 weeks. Investors can be encouraged by the fact that the stock has a 7.5% dividend yield. The company has $13.47 billion of cash in the bank, so the dividend should be secure.

Investors might also be encouraged by rumors that Microsoft Corporation (OTCQB:MFST) may be interested in acquiring Nokia. These rumors have increased since Google purchased Motorola’s (NYSE:MMI) mobile communication unit. I think that Nokia is a great company, and I like the security of its dividend income. I rate Nokia Corporation as a buy.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 4 High Yield Dividend Stocks With Attractive Valuations