6 Solid Reasons To Invest Into This 3% Yielder

Jun.10.12 | About: Time Warner (TWX)

Given the recent volatility in the market and the ongoing turmoil in Europe, investing in companies with solid and growing dividend yields, low valuations and consistent earnings streams makes good investment sense. One stock that fits these criteria right now is Time Warner (NYSE:TWX).

"Time Warner Inc operates as a media and entertainment company in the United States and internationally. It operates in three segments: Networks, Filmed Entertainment, and Publishing." (Business description from Yahoo Finance)

6 reasons TWX is a solid pick for income investors at $35 a share:

  • Time Warner yields a solid 3% and has consistently raised its dividend payout consistently over the last few years.
  • TWX has beat earnings estimates each of the last twelve quarters and sells for under ten times forward earnings, a discount to its five year average (13.1)
  • The stock is selling at the bottom of its five year valuation range based on P/E and P/CF.
  • Ad revenue rose 6% in the first quarter and the stock has a five year projected PEG of under 1 (.94).
  • The 27 analysts that cover the stock have a $43 a share price target on the stock. Credit Suisse has an "outperform" rating and a $45 price target on TWX.
  • TWX has short term technical support at just under these levels (See Chart)

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