High dividend paying stocks are a meaningful addition to a portfolio almost always. However, the deal is further sweetened if these high yielders are locked at lower prices or when they are rebounding. As such, this is a great time to buy Rhino Resource Partners LP (NYSE: RNO) and Educational Development Corporation (NASDAQ: EDUC), which seems to have bottomed out recently.
While Rhino Resource Partners LP is a mining firm whose stock has not performed up to the mark so far this year, the stock's rock bottom valuations offer some hope. With nearly 11 percent drop in the last 12 months, the stock has grossly underperformed broader markets. However, this performance is in line with the mining industry which has seen demand of basic materials falling to abysmal levels this year. The benchmark SPDR S&P Metals and Mining ETF (NYSEARCA: XME) index has dropped 12 percent in the same period. Lately, some buying activity has lifted the stock of Rhino Resource. Without doubt, the company is in troubled waters as the demand of steam and metallurgical coal - its primary products - is falling given abundant supply of natural gas. On the positive side, the company boasts of a healthy gearing. In addition, the stock trades at a 44 percent discount to its book value of $18.3 per share. A price earnings ratio of 2.2 is pretty low, but the real gem is the 17.3 percent dividend yield. Despite falling profits, the company has not reduced dividends and while the stock may not make sense from capital appreciation perspective, this fantastic dividend yield is hard to miss.
Children's books publisher Educational Development Corporation saw its share reducing to $2.4 in September from levels of $3.5 in the starting of the year. However, this dividend paying stock is witnessing a revival of fortunes lately and has moved up 8 percent over the last month. Despite the northward movement, the stock offers annual dividend yield of nearly 10.6 percent at current levels. The company operates in a market which can be described as stagnant so there are no sharp spikes, but absence of a major downside makes it a perfect stock offering stabilization to a portfolio. This small publisher, with a market capitalization of just $12 million, has a lot of positives including a gross margin of 57 percent. In terms of valuations, a debt equity ratio of 0.1 sits comfortably while 8 percent discount on its book value leaves enough upside potential.