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In my last article, which you can check out here, I took a look at a couple of high yield stocks and some bluechips that from the staples of most dividend growth investor's portfolios. I concluded that many blue chips like McDonalds Corp were very richly valued. High yield sectors were extremely overvalued.

I did suggest that for conservative stock investors, you could do worse than paying a good price for a good company. Even though there was little value left in these names, companies like Coca Cola (NYSE:KO) would likely be slow but steady performers.

For the more aggressive investor, I encourage taking a look at dividend growth stocks in sectors that are currently out of favor: industrials, transports and materials. Below are five stocks that are very cheap as measured by P/E and PEG ratios and have a strong history of dividend growth.

CSX Corp (NYSE:CSX)

CSX Corp is a railroad company focused on the mid and eastern United States where their lines connect with eastern sea ports. Railroads are duopolies, with high barriers to entry, wide moats and significant pricing power. CSX has raised their dividend aggressively: look at their amazing five year annualized dividend growth rate of 60%. With their low payout ratio, CSX has the room to keep hiking their payouts and rewarding shareholders with ever more cash. The stock has handily outperformed the S&P 500 this decade but is down over 18% YTD over economic concerns.

CSX Corp

Earnings Yield

8.3%

P/E Ratio

12.4

PEG Ratio

0.51

Dividend Yield

2.3%

Payout Ratio

22%

5 year Dividend Growth Rate

60%

5 Year Total Return

16.2%

Deere & Company (NYSE:DE)

Deere & Company is a leading manufacturer of machinery for the mining and, especially, agricultural sectors. The company's green and yellow tractors have an almost cult-like following among their customers, lending an incredible strength to Deere's brand. With the world's growing population fueling an increasing need for agriculture, Deere is a great long-term hold. The market's distaste for any cyclical stock has pushed the stock down to almost ridiculous levels as evidence by a PEG ratio of only 0.35.

Deere & Co

Earnings Yield

8.3%

P/E Ratio

12.1

PEG Ratio

0.35

Dividend Yield

2.3%

Payout Ratio

23%

5 year Dividend Growth Rate

15.6%

5 Year Total Return

12.5%

Ensco International (NYSE:ESV)

Ensco provides off-shore drilling rigs to the oil & gas sectors. They are the second-largest deep-sea driller and have the youngest drilling fleet amongst their competitors. As conventional oil is becoming increasingly rare, Ensco is reaping the profits from increased activity in deep-sea drilling. While the P/E ratio of 18 is higher than the market, the company is still experiencing explosive double digit EPS growth and is projected to continue to do so. High oil prices drive increased capital expenditures from the E&P stocks, which benefit the service providers. If you think oil prices are going to remain high, Ensco is a great buy.

Ensco

Earnings Yield

5.5%

P/E Ratio

18.1

PEG Ratio

0.62

Dividend Yield

2.7%

Payout Ratio

45%

5 year Dividend Growth Rate

71.9%

5 Year Total Return

3.3%

Cameco Corp (NYSE:CCJ)

Cameco Corp, a leading uranium miner based in Canada, has not had an easy go of things. It has reeled from the decline in uranium prices, to the financial crises, to last year's nuclear disaster in Japan. It feels like every time the stock seems to be getting its mojo back, disaster strikes. Things do seem to be turning around for Cameco however, as countries are beginning to makes plans for building new reactors. Even Japan is talking about bringing their reactors back online. You can forgive investors for being skeptical that uranium prices are really going to recover, but the market's skepticism has created a nice buying opportunity for Cameco. Even through the trials and tribulations this company has faced the last five years, they have none-the-less kept hiking their dividend aggressively.

Cameco Corp

Earnings Yield

4.4%

P/E Ratio

22.6

PEG Ratio

0.41

Dividend Yield

1.7%

Payout Ratio

36%

5 year Dividend Growth Rate

14.9%

5 Year Total Return

(7.7)%

Ecopetrol S.A. (NYSE:EC)

Ecopetrol is the largest oil company in Columbia. It is a vertically integrated oil company - meaning they have downstream, midstream and upstream operations. Ecopetrol is the dominant player in marketing and refining activities in Columbia, and they also have large reserves in Columbia, Peru and Brazil and are rapidly increasing production. One concern is that the company is state-owned but the Columbian government seems to have genuinely embraced capitalism: they allow Ecopetrol to be run with independently and are slowly divesting themselves of the company's stock.

I bought a lot of EC last year when the stock was hovering around $40 - it is trading a little under $60 today. I expect a lot of investors will look at the huge run the stock has had this year and felt like they have missed the party. I disagree! With an above average yield and strong projected revenue growth over the next five years, there is still a lot of value let in Ecopetrol. The stock has a P/E of 16.5, which may seem high compared to the majors but isn't when you consider Ecopetrol's rapid growth: evidenced by a PEG ratio of only 0.88.

Ecopetrol's dividend policy is to pay out 70% of net income in dividends, so the yield will increase with earnings.

Ecopetrol

Earnings Yield

6.1%

P/E Ratio

16.5

PEG Ratio

0.18

Dividend Yield

3.7%

Payout Ratio

38.6%

3 year Dividend Growth Rate

71.9%

3 Year Total Return

100.3%

Source: Looking For Cheap Dividend Growth Stocks