Seeking Alpha
Seeking Alpha Portfolio App for iPad
Finance
(1)

Two 4% Yielders With Solid Support

Dec 19 2011, 10:15 by: Bret Jensen  |  includes: HSC, WM

I believe the market turmoil will continue until we get some sort of resolution in Europe. This makes my outlook defensive. One area I am investing in is stocks with high dividends selling at historical low valuations. Here are two that meet those criteria and also look like they have technical support at these price levels.

Waste Management (WM) – “Waste Management, Inc., through its subsidiaries, provides waste management services to residential, commercial, industrial, and municipal customers in North America. It offers collection, transfer, recycling, and disposal services. The company also owns, develops, and operates waste-to-energy and landfill gas-to-energy facilities in the United States”. (Business description from Yahoo Finance)

4 reasons why WM is a bargain at $31 a share:

  1. The stock has a juicy 4.4% yield and the company has raised its dividend at an 8% average clip over the last five years.
  2. Waste Management is selling in the bottom third of its five year valuation range based on P/E, P/B and P/S.
  3. The stock looks like it is in a bottoming process (See Chart).

4. The stock is under some key analysts’ price targets. S&P has a $37 price target on Waste Management and Credit Suisse has a price target of $36 on WM.

Harsco Corporation (HSC) – “Harsco Corporation provides engineered solutions to industrial customers worldwide. The company operates in four segments: Harsco Infrastructure, Harsco Metals & Minerals, Harsco Rail, and Harsco Industrial”. (Business description from Yahoo Finance)

4 reasons Harsco will reward long term investors at $20 a share:

  1. The stock has a solid 4.1% yield, and the company has raised its dividend at a 3% average clip over the last half decade.
  2. HSC has solid long term technical support in the $20 range (See Chart)

3. Harsco is selling at the bottom of its five year valuation range based on P/CF, P/B and P/S.

4. The stock is significantly under analysts’ price targets. The median analyst price target on Harsco is $29.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in HSC over the next 72 hours.