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TheStreet Open House

15 Cheap High-Dividend Stocks for Defensive Investors

Stocks in this article: NLYCTLETRDUKAEPXELCOP

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Insider Monkey) -- We like high-dividend stocks because they tend to outperform the market when everything else is going down. In addition, we consider high-dividend stocks as alternatives to 10-year Treasury bonds in this current low-interest environment. We believe the recent downturn in the stock market has given defensive investors a great opportunity to add such high-yielding stocks in their portfolios.

Below, we provide a list of 15 mega-cap U.S stocks with high dividend yields and low price-to-book ratios. The market data are sourced from Fidelity. All companies in this list have market capitalizations above $10 billion, an annualized dividend yield of at least 3%, a current P/E ratio lower than 15 and a price-to-book ratio of less than 1.5. Since the beginning of this year, these stocks returned -5.16 % vs. -3.52 % for the SPY.

Annaly Capital Management (NLY) owns, manages and finances a portfolio of real estate related investments. NLY has a 15.02% dividend yield and returned -1.74% since the beginning of this year. The stock has a price-to-book ratio of 1.01 and a P/E Ratio of 5.63. Among the 300+ hedge funds we track, Bill Miller had the largest NLY position at the end of the second quarter.

CenturyLink (CTL) is a leading integrated communications company providing Internet services in the United States. CTL has an 8.65% dividend yield and lost -23.37% since the beginning of this year. The stock has a price-to-book ratio of 1.01 and a P/E Ratio of 14.21. Adage Capital held more than $100 Million of CTL in Q2 2011.

Entergy (ETR) is an integrated energy company engaged primarily in electric power production and retail electric distribution operations. ETR has a 4.98% dividend yield and lost -3.68% since the beginning of this year. The stock has a price-to-book ratio of 1.39 and a P/E Ratio of 9.50. Jean-Marie Eveillard had more than $150 Million in ETR at the end of June 2011.

Duke Energy (DUK) is a large energy company operating in the United States. DUK has a 4.94% dividend yield and gained 16.48% since the beginning of this year. The stock has a price-to-book ratio of 1.20 and a P/E Ratio of 13.16. Michael Messner and Israel Englander were the most prominent DUK investors in Q2.

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