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Yield is at a premium these days. Given the volatility I expect in the first half of 2012, stocks with high dividends and low valuations look attractive here. One I like quite a bit is Lockheed Martin (NYSE:LMT).

Lockheed Martin Corporation engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, and government information technology in the United States and internationally. (Business description from Yahoo Finance.)

6 reasons why Lockheed is a solid bargain at $79 a share:
  1. The stock yields over 5%, and has raised its dividend at over 22% on average over the past five years.
  2. The company just got a huge contract win in selling fighter jets to Japan.
  3. The company is consistently underestimated by analysts. It has beat consensus earnings for 12 straight quarters.
  4. It is selling at the bottom of its five-year valuation range based on P/S, P/B and P/CF.
  5. Lockheed is a favorite of hedge funds, which own almost $900 million of shares currently.
  6. The stock is cheap at 10 times forward earnings and 8 times operating cash flow.
Source: Lockheed Martin: A Cheap 5% Yielder To Buy Now