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Mispricing Evident in Three Stocks' Dividends

NEW YORK ( TheStreet) -- As China and other emerging market economies' growth slowed this year, material stocks were hit hard. Within the sector Cliffs Natural Resources (CLF - Get Report) was among the hardest hit, with shares falling nearly 50% in the past year. At these levels, I believe there are compelling reasons to own the stock.

At $31 per share, the stock trades at a very low valuation -- a forward price-to-earnings ratio of 8. All the while, consensus estimates from analysts following the company expect EPS growth rate of 19.24% over the next 5 years. Moreover, the company pays a $2.50 per share dividend -- that's a whopping 8%.

Another victim of the global slowdown has been corporate IT spending. As a result, Intel (INTC - Get Report) lost its favor with investors falling by some 30% from its year-to-date highs.

With shares trading below $20, the stock now boasts a 4.5% dividend, all the while having an expected EPS growth rate of 28.19% based on analyst consensus. With a forward P/E below 10 the valuation is very attractive at these levels.

Across the pond, as my British friends like to say, the European debt crisis has unearthed some terrific long-term opportunities as well. Total SA (TOT - Get Report), the French oil and gas company, with operations in more than 130 countries, is an attractive investment for those who are willing to bet on a resolution to the European crisis.

With shares trading below $50 the stock offers a dividend yield near 6%, with a forward P/E below 10 -- considerably lower than its U.S. rival Exxon Mobil (XOM). Some caution is warranted, as lower fuel consumption and technological advances have analysts calling for an EPS decline in 2013. None-the-less, I believe the outlook is constructive for this multi-national.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Oliver Pursche is President of Gary Goldberg Financial Services, a boutique money management firm located in Suffern, NY. Additionally, Mr. Pursche is the Co-Portfolio Manager for the GMG Defensive Beta Fund, and a Founding Partner of Montebello Partners, llc. In his role as President of GGFS, and as a member of the GGFS Investment Committee, Mr. Pursche helps oversee the investment portfolio of over 2000 clients with over $500 million dollars in assets. Mr. Pursche frequently provides market and economic commentary on CNBC and Fox Business News, as well as often being interviewed by The Financial Times, US News and World Report, Thomson Reuters, Bloomberg Businessweek, and the Associated Press regarding his and the firms views on the latest market news and events. Mr. Pursche's views on the market and investment strategies have been featured in the Wall Street Journal, Investors Business Daily, Smart Money, USA Today and other national business publications. In addition to writing for TheStreet.com, he is also a weekly contributor on Forbes.com and BankRate.com. His daily market commentary can be read at www.betafundcommentary.com or you can listen to him on www.financialtalkshow.com weekdays at 10:00 AM.

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SYM TRADE IT LAST %CHG
CLF $2.52 0.00%
INTC $28.95 0.00%
TOT $49.29 0.00%
AAPL $121.30 0.00%
FB $94.01 0.00%

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