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10 Dividend Stocks with Yields Up to 10%
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TheStreet Investment Analyst
4. Pitney Bowes [PBI
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] sells mail processing equipment and services, and pays a 7.4% dividend. Second-quarter profit tumbled 48% to $61 million, or 31 cents a share, as revenue declined 5.9%. The operating margin fell from 17% to 16%. Pitney Bowes shares trade at a trailing earnings multiple of 11, a forward earnings multiple of 8.9, a sales multiple of 0.8 and a cash flow multiple of 5.4 — 56%, 54%, 56% and 52% discounts to peer averages. Around 40% of analysts rate the stock "buy," 40% rate it "hold" and 20% rank it "sell." A median target of $24 suggests a 22% return.
3. Offering an 8% dividend yield is CenturyLink [CTL
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], an integrated telecommunications company about to merge in a stock-for-stock deal with Qwest [Q
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]. Second-quarter net income more than tripled to $239 million, but earnings per share gained a more modest 16% to 79 cents. Revenue more than doubled. The operating margin rose from 28% to 31%. CenturyLink's stock sells for a forward earnings multiple of 11 and a book value multiple of 1.1 — 19% and 55% discounts to peer averages. Roughly 65% of analysts rate it "buy." A median target of $38.17 implies 6% of growth potential.
2. Windstream [WIN
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] sells telecom services in rural areas of the U.S., and pays shareholders an 8.4% dividend. Its second-quarter profit decreased 13% to $79 million, or 17 cents a share, as revenue stretched 22% to $917 million.
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The gross margin remained steady at 62%, but the operating margin fell from 33% to 30%. Windstream's stock trades at a premium to peers based on forward earnings, book value and cash flow. Around 55% of analysts following Windstream rate its stock "buy" and the remaining 45% rank it "hold." A median target of $12.75 suggests a 7% return.
1. Topping the list with a dividend yield of 9.8% is Frontier Communications [FTR
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], which sells voice, data and video services to residential, business and wholesale customers. Second-quarter profit increased 26% to $35 million, or 11 cents a share, as revenue contracted 3% to $516 million. The operating margin rose from 28% to 34%. Frontier's stock trades at a premium to peers based on forward earnings, book value and sales. It's cheap based on cash flow per share. Roughly 20% of researchers rate it "buy", 53% rate it "hold" and 27% rank it "sell." A median target of $7.69 implies that the stock is fairly valued.
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Disclosures:
Disclosure information was not available for Lynch or his company.
Data is a real-time snapshot *Data is delayed at least 15 minutes
