As the markets whipsawed up and down last week, investors panicked. Should they sell before things get worse, or take advantage of opportunities that might be out there? It's a tough call to make sometimes. The best advice I can give is to stay the course of your investing strategy, whatever it may be.
However, if you have some cash to invest, now is a great time to pick up some really awesome dividend stocks at dirt cheap prices. Companies that pay dividends have illustrated that over time, they have outperformed their nonpaying brethren. In addition, these same companies tend to be more conservative and more focused on rewarding their shareholders by consistently shelling out those lucrative dividend payments. So if you can take advantage of a time like right now, when the market is already down 10% over the past three months, you might be able to find that hidden gem you've been looking for.
To help you on your quest, I ran a screen for service companies paying dividends above 2%, with P/E ratios less than 17, that are trading at least 20% below their 12-month high, and that have garnered the respect of our CAPS investing community with a four- or five-star rating. I've ranked and ordered the results below by the top seven highest dividend payers.
% Below 12-Month High
Capital Product Partners (NAS: CPLP)
Star Bulk Carriers (NAS: SBLK)
DHT Holdings (NYS: DHT)
Ship Finance International (NYS: SFL)
Navios Maritime Partners (NYS: NMM)
Safe Bulkers (NYS: SB)
Navios Maritime (NYS: NM)
Source: CAPS data, 8/15/11.
Granted, there are probably some good reasons why some of these stocks are trading so cheaply and have fallen from grace. Many of the dry bulk carriers have suffered in the last year as an oversupply of ships has compressed prices and margins. Star Bulk recently announced it would sell an additional 19 million new shares of stock, which would increase the current share count by about 30% -- not exactly what current shareholders were looking for.
Nonetheless, these stocks are paying absolutely phenomenal dividends and are trading extremely cheap, so if you've got interest in them, it would pay to do your own due diligence and look into them further.
Seeking out other dividend stocks that could help boost your portfolio? Check out my colleague's brand-new article "The Downgrade Be Damned: Here's What I'm Buying Now."
At the time thisarticle was published Jordan DiPietro owns no shares of companies mentioned above.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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