It's not common to find companies that trade below their breakup value (i.e., less than book value) after a 60%-plus rise in the broad market, yet still pay out hefty dividends. But when the package is also delivered up with low P/E readings and some momentum to boot, you'd have to be crazy not to take a look.
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Here are several such issues: companies with price-to-book ratios of less than one, dividend yields of better than 7% and multiples of less than six-times last year's earnings..
Real Estate Play
Northstar Realty Finance (NYSE:NRF) is an investment company that invests in commercial real estate debt and equity. The company is structured as a REIT for income tax purposes and currently boasts some very strong fundamentals.
NRF's dividend yield is a very healthy 11.44% and the P/E ratio is a measly 0.73. The stock currently trades well below book value with a P/B of just 0.22.
Jets and Energy
Babcock & Brown Air, Ltd. (NYSE:FLY) also sports a very low P/E ratio, at just 3.37-times last year's earnings. The Ireland-based lessor of jet airlines also pays a handsome 8.92% annual dividend and trades with a P/B of 0.58.
Babcock & Brown shares are up over 250% since bottoming in February.
EV Energy Partners, L.P. (NASDAQ:EVEP) is a Master Limited Partnership (MLP) that develops and operates oil and natural gas properties across the United States. The stock trades with a 1.38 trailing P/E and is no slouch in the yield department, either, offering an annual payout of 11.84%. P/B on the stock is 0.91.
Chinese Oil Drills
WSP Holdings (NYSE:WH) is an American company that conducts all of its operations through China-based subsidiaries. The company produces parts for use in the oil-drilling business and pays an annual 7.44% dividend yield. The P/E is 4.66 and P/B of 0.95.
Enerplus Resources Fund (NYSE:ERF) has a P/B of 0.97 and trades with a multiple of 5.75-times last year's earnings. The stock also fetches 8.89% annually for those who seek income. Enerplus is a closed-end investment fund that invests in the crude oil and natural gas assets of its subsidiaries.
The Wrap
Several metrics help investors determine whether stocks are selling at good value. Above, we've highlighted five such value issues, with great P/E and P/B ratios and rocking dividend yields. (For related reading, see The Importance of Dividends.)
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