Top 10 Cheap Dividend Plays
One of the classic financial ratios is the price-to-earnings ratio , or P/E, which is the price of the stock divided by the earnings per share. The lower the P/E, the better.
The average P/E for the Dow Jones Industrial Average is 16.7. If you look at the companies that raised their dividends last week, nine of them had P/E's that were lower than the Dow's P/E. Stockpickr.com has reviewed the stocks that increased their dividends, and compiled the ones with the lowest P/E ratios.
Cincinnati Financial (CINF) sits atop the list with the lowest P/E: 9. Cincinnati Financial is an insurance company that offers commercial and personal property insurance, casualty insurance and life insurance.
It just increased its dividend by 6%, yielding 3.6%. This is the 47th consecutive increase of the dividend. The stock carries a 1.2 P/E-to-growth (PEG) ratio. This Ohio-based company, which currently operates in 33 states, has recently decided to expand to New Mexico.Cincinnati Financial shows up in the portfolio of the 5-Star Morningstar-rated Allegiant Mid Cap Value I Fund Arvix, which is managed by Michael Santelli. The fund has had an average annual return of 24.25% over the last three years. Allegiant also owns Edison International (EIX), the electric utility that serves central and southern California. Edison has a P/E of 15, a PEG of 1.9 and a yield of 2.2%.
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