6 Dividend Stocks With Big Yields And Rebound Potential

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Includes: COP, ETP, LNGG, OHAI, SDRL, TOT
by: Hawkinvest

A recent CNBC article states:

Now is the time to buy oil stocks before they change course and rise, two analysts told CNBC Thursday. "Buy them on the dip, because it will be tougher from here on out," said Pavel Molchanov, senior vice president and energy analyst at Raymond James. The sector may be lower now but it outperformed in 2009, 2010, and the first half of this year, he added.

Oil prices have dropped from the 2011 highs and that has created some great buying opportunities with oil stocks. However, due to the turmoil in the stock market, I would prefer to have exposure to energy through stocks in this sector with high dividends. Stocks with solid dividends pay you to wait and usually reduces the volatility. The stocks below offer dividends that top almost any bond, plus there is a strong chance investors could see capital gains if these shares rebound:

Seadrill Limited (NYSE:SDRL) offers offshore drilling services to oil and gas companies. This stock was trading regularly between $35 and $36 before the recent market correction. With a yield of almost 10% and the stock trading well off the 52-week high, this could be a good rebound candidate.
Current share price: $31.38
The 52-week range is $22.40 to $38.49
Earnings estimates for 2011: $2.86
Earnings estimates for 2012: $3.28
Annual dividend: $3 per share, which yields about 9.4%
NGP Capital Resources Company, Inc. (NGPC) is a company that specializes in the oil and gas industry by making diversified investments through secured, senior, subordinate debt, convertible debt, and equity in promising companies. NGPC returns some of the investment gains to shareholders with one of the highest dividend payouts in the sector-over 10%. NGPC is trading below book value which is $9.63. NGPC insiders seem to think the stock is undervalued as they bought nearly 30,000 shares in August alone. This stock regularly traded around $8.50 to even over $9 recently and a rebound to those levels is likely when markets calm down.
Current share price: $6.85
The 52-week range is $6.21 to $10.89
Earnings estimates for 2011: 76 cents per share
Earnings estimates for 2012: 89 cents per share
Annual dividend: 72 cents per share, which yields over 10%
Total SA (NYSE:TOT) is a major integrated oil company, based in France with operations worldwide that include refining, exploration, and service stations. Total stock has been declining based on lower oil prices and debt concerns in Europe. It now trades at a very cheap price to earnings ratio of about 6.5 and pays a strong dividend.
Current share price: $47.11
The 52-week range is $43.81 to $64.44
Earnings estimates for 2011: $7.61 per share
Earnings estimates for 2012: $8.02 per share
Annual dividend: about $3.20 per share, which yields about 6.5%
ConocoPhillips (NYSE:COP) is one of the largest integrated oil and gas companies. This company is involved in exploration, production, processing, and transportation of various energy products and fuels. This company has extensive oil and gas reserves which will increase in value as energy prices rise. Chances are dividends will also grow with earnings and offer investors a hedge against inflation.
Current share price: $67.17
The 52-week range is $52 to $81.80
Earnings estimates for 2011: $8.19 per share
Earnings estimates for 2012: $8.87 per share
Annual dividend: $2.64 per share, which yields 4%
Energy Transfer Partners (NYSE:ETP) provides natural gas pipeline and transportation services, and sells propane in the United States. This stock offers a strong dividend payout and yields almost 8%. It is also trading well off the 52-week highs, so the shares look attractive now for both the dividend and potential share price appreciation.
Current share price: $43.79
The 52-week range is $40.25 to $55.50
Earnings estimates for 2011: $2.12 per share
Earnings estimates for 2012: $2.67 per share
Annual dividend: $3.58 per share, which yields 8.2%
Linn Energy LLC (LINE) is an independent oil and natural gas company and has interests in properties located in Oklahoma, Kansas, Louisiana, Illinois, Michigan, California, Texas and New Mexico. This company has a solid history of paying dividends and just recently, LINE raised the payout by 5%.
Current share price: $36.85
The 52-week range is $29.25 to $41.13
Earnings estimates for 2011: $2.02 per share
Earnings estimates for 2012: $2.42 per share
Annual dividend: $2.76 per share, which yields 7.5%
Disclosure: I am long NGPC.