Many investors think that the perfect stock is one that sells for a low price and pays a high yield. It may be hard to believe but there are actually several stocks, including closed-end funds or CEF's, that sell for less than $5 a share and pay a dividend, with five of the stocks with yields in excess of 6%.
All of the following stocks pay quarterly unless otherwise specified. Also, all of the following have market caps above $265 million. Just remember that the yields are based on historical payments, and the dividends can be adjusted or terminated at any time.
- Zweig Fund (NYSE:ZF) is a CEF with an objective of capital appreciation primarily through investment in equity securities. The stock has a P/E of 12, and a yield of 10.4%.
- Zweig Total Return Fund (NYSE:ZTR) is a CEF with an objective of capital appreciation and current income, with equity investments in technology, energy, industrials, consumer staples, and financials. The stock has a P/E of 13, and a yield of 10.3%.
- Dreyfus High Yield Strategies Fund (NYSE:DHF) is a CEF which invests in fixed-income securities which are generally below investment grade credit quality. The stock has a P/E of 12, and a yield of 9.1%.
- Qwest Communications International (NYSE:Q) is a provider of wireline and wireless voice, data, Internet, and video services. The stock has a P/E of 3, a PEG of 4.66 and a yield of 6.8%.
- Colonial Bancgroup Inc (CNB) is a commercial bank holding company which serves Alabama, Florida, Georgia, Nevada and Texas. The stock has a P/E of 5 , a PEG of 1.21 and a yield of 6.4 %.
- United Microelectronics Corp (NYSE:UMC) is a Taiwan-based semiconductor manufacturer. It pays dividends annually. The stock has a P/E of 19, a PEG of 1.8 and a yield of 3.2%.
- Mahanagar Telephone Nigam Ltd. (NYSE:MTE) is an India based provider of fixed line telecommunications services in Delhi and Mumbai. It pays dividends semi-annually. The stock has a P/E of 6 , a PEG of 5.01 and a yield of 5.6%.
- Quest Capital Corp (QCC) is a Canadian real estate mortgage financing company. It recently announced a dividend of $0.045 per share which is an 80% increase over the previous dividend. The stock has a P/E of 13 and a yield of 5.1%.
- UCBH Holdings Inc. (UCBH) is a San Francisco bank holding company which owns United Commercial Bank. The stock has a P/E of 5 , a PEG of 0.67 and a yield of 3.7%.
- Transportadora de Gas Del Sur S.A. (NYSE:TGS) is an Argentina-based transporter and marketer of natural gas. The stock has a P/E of 12 and a yield of 0.9%.
Disclosure: The author does not own any of the above.