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Defensive investors like high dividend stocks since they believe these stocks can protect them from potential inflation. In our recent study, we have shown that the average return of high dividend stocks was 13.04% between 1927 and 2009, beating the market by an average of 1.36% per year.

Below we compiled a list of 18 mid-cap companies that pay fat dividend checks and have low P/E ratios. All companies on this list have a market capitalization between $2 and $10 billion, P/E ratio lower than 10 and dividend yield of at least 5%. The market data is sourced from Finviz.

Ticker

Company

P/E

Dividend Yield

YTD Return

BIP

Brookfield Infrastructure Partners

8.21

5.08%

36.33%

DNP

DNP Select Income Fund Inc.

4.59

7.66%

17.42%

ARLP

Alliance Resource Partners LP

9.88

5.10%

14.14%

AGNC

American Capital Agency Corp.

4.13

19.27%

11.17%

SXL

Sunoco Logistics Partners L.P.

8.44

5.51%

10.08%

AT

Atlantic Power Corporation

5.48

7.58%

3.70%

HTS

Hatteras Financial Corp

6.63

14.69%

-3.71%

KYN

Kayne Anderson MLP

4.51

7.07%

-6.26%

MFA

MFA Financial, Inc.

7.47

13.95%

-6.76%

ARCC

Ares Capital Corporation

6.25

10.01%

-9.27%

KKR

Kohlberg Kravis Roberts.

6.43

6.46%

-13.85%

TEO

Telecom Argentina SA

7.34

7.93%

-14.33%

SKM

SK Telecom Co. Ltd.

6.99

5.35%

-21.58%

CIM

Chimera Investment Corp

5.16

17.39%

-21.93%

BAK

Braskem S.A.

9.73

5.59%

-23.79%

CEL

Cellcom Israel Ltd.

6.39

16.56%

-31.85%

UMC

United Microelectronics

6.43

9.93%

-33.90%

STM

STMicroelectronics NV

5.79

6.17%

-37.57%

Here are the top ten, mid cap, cheap dividend stocks with highest the YTD returns:

Brookfield Infrastructure Partners L.P. (NYSE:BIP): Brookfield Infrastructure Partners L.P. and its related entities own and operate certain infrastructure assets on a global basis. BIP has a dividend yield of 5.08% and returned 36.33% since the beginning of this year. It has a market cap of $4.3B and a P/E ratio of 8.21. Mohnish Pabrai had $44 million invested in BIP shares (check out Pabrai’s top stock picks).

DNP Select Income Fund Inc. (NYSE:DNP): DNP is a closed-end diversified management investment company. DNP has a dividend yield of 7.66% and returned 17.42% since the beginning of this year. It has a market cap of $2.4B and a P/E ratio of 4.59.

Alliance Resource Partners LP (NASDAQ:ARLP): Alliance Resource Partners is a diversified producer and marketer of coal primarily to the United States utilities and industrial users. ARLP has a dividend yield of 5.10% and returned 14.14% since the beginning of this year. It has a market cap of $2.7B and a P/E ratio of 9.88. Chuck Royce had $22 million invested in ARLP (check out Royce’s top stock picks).

American Capital Agency Corp. (NASDAQ:AGNC): AGNC is a real estate investment trust invests in residential mortgage pass-through securities and collateralized mortgage obligations on a leveraged basis. AGNC has a dividend yield of 19.27% and returned 11.17% since the beginning of this year. It has a market cap of $5.2B and a P/E ratio of 4.13. John Burbank invested $233 million in AGNC shares (check out Burbank’s top stock picks).

Sunoco Logistics Partners L.P. (NYSE:SXL): Sunoco Logistics Partners L.P. owns and operates a logistics business, consisting of complementary pipeline, terminalling, and crude oil acquisition and marketing assets. SXL has a dividend yield of 5.51% and returned 10.08% since the beginning of this year. It has a market cap of $2.9B and a P/E ratio of 8.44. Chuck Royce had $20 million SXL shares.

Atlantic Power Corporation (NYSE:AT): Atlantic Power Corporation owns and operates a diverse fleet of power generation and infrastructure assets in the United States. AT has a dividend yield of 7.58% and returned 3.70% since the beginning of this year. It has a market cap of $5.0B and a P/E ratio of 5.48. Jim Simons is the main holder of AT.

Hatteras Financial Corp (NYSE:HTS): Hatteras Financial Corp. is an externally managed mortgage real estate investment trust. HTS has a dividend yield of 14.69% and returned -3.71% since the beginning of this year. It has a market cap of $2.0B and a P/E ratio of 6.63. James Melcher had $52 million invested in HTS stocks.

Kayne Anderson MLP Investment Company (NYSE:KYN): Kayne Anderson MLP Investment Company is a non-diversified, closed-end fund. KYN has a dividend yield of 7.07% and lost 6.26% since the beginning of this year. It has a market cap of $2.1B and a P/E ratio of 4.51.

MFA Financial, Inc. (NYSE:MFA): MFA Financial, Inc. is engaged in the business of investing in residential Agency and Non-Agency mortgage-backed securities. MFA has a dividend yield of 13.95% and lost 6.76% since the beginning of this year. It has a market cap of $2.6B and a P/E ratio of 7.47. Charles Clough had $11 million invested in MFA shares.

Ares Capital Corporation (NASDAQ:ARCC): Ares Capital is a closed-end, non-diversified management investment company. ARCC has a dividend yield of 10.01% and returned -9.27% since the beginning of this year. It has a market cap of $2.9B and a P/E ratio of 6.25. Scott Scher and Michael Prober had $40 million invested in ARCC shares.

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

Source: 18 Cheap Mid-Caps For High Dividend Lovers