5 Dirt-Cheap Dividends Paying Up To 7.6%

Core Viewpoint - The article discusses potential investment opportunities in cheap dividend-paying stocks that yield between 5.3% and 7.6%, despite the broader market recovery. It highlights five specific companies that remain undervalued and offers insights into their financial metrics and challenges [1][2]. Group 1: Company Summaries - Bristol-Myers Squibb (BMY): A $90 billion pharmaceutical company with a low PEG of 0.12 and a cash-flow multiple of 7. It has a dividend yield of over 5% but faces profitability concerns due to competition affecting core drugs, leading to a 44% revenue drop for Revlimid in Q1 [3][5][6]. - HF Sinclair (DINO): Formed from a merger, it operates seven U.S. refineries and has a crude oil processing capacity of 678,000 barrels per day. The stock has a PEG of 0.2 and a P/CF of 7.3, reflecting a more than 30% drop over the past year, primarily due to industry-wide challenges [7][10]. - AES Corp. (AES): A utility company serving 2.7 million customers with a diverse energy portfolio. It has a PEG of 0.8 and a forward P/CF of 5, but has seen its stock lose over half its value in 2023 due to aggressive transitions to renewables and project delays [13][14][15]. - Polaris (PII): A manufacturer of recreational vehicles, its stock has dropped over 70% since July 2023, resulting in a high dividend yield. The company has faced declining demand and significant revenue and profit drops, with a PEG of negative 1.6 [17][18][20]. - Atlas Energy Solutions (AESI): An energy equipment and services company that has been increasing its dividends since its IPO in March 2023. It has a PEG of 0.2 and a forward P/CF of 5.5, but faces challenges due to fluctuating oil prices affecting demand [21][22][23]. Group 2: Financial Metrics - Valuation Metrics: All highlighted companies have a PEG below 1, indicating they are undervalued. The article emphasizes the importance of PEG and P/CF ratios in assessing investment opportunities [8][10]. - Dividend Coverage: Companies like DINO and AES have strong dividend coverage ratios, with DINO expected to have a coverage of 180% due to anticipated earnings growth in 2026 [12][16]. - Market Challenges: Each company faces unique challenges, such as competition, industry weakness, and fluctuating demand, which have impacted their stock performance and profitability [4][5][10][18].