Monday, September 05, 2011

High Yield Stocks Below $10 a Share

Most investors still believe that it is easier to get a better return on lower priced stocks than higher priced stocks. However, it really doesn't make a difference on a generalized basis. Just look at the performance of Warren Buffett's Berkshire Hathaway (BRK-A) A shares. Fifteen years ago, Berkshire was trading at a high priced 32,150 per share. It has more than tripled in price to 104,000.

Even still, from a psychological standpoint, investors like lower priced shares. just updated its list of high yielding stocks under $10 a share. Many of the companies listed are closed end funds, such as the Blackrock Enhanced Dividend Achievers (BDJ), which sports a yield of 9.4% and the Putnam Premier Income Fund (PPT), which pays out a yield of 9.2%.

Yet there are also regular corporations, such as Alaska Communications (ALSK) which provides landline and wireless services to the 49th state, which happens to be the largest state by area. The stock sells for a little over $7 per share, has a forward price to earnings ratio of 19, and pays a yield of 11.8%. The company reports earnings on October 26.

Another example is Provident Energy (PVX) processes, transports, stores, and markets natural gas liquids in the United States and Canada. It sells for a bit over $8 per share, and yields 6.5%. It recently generated negative earnings.

Hercules Technology (HTGC) which is a private equity, venture capital, and venture debt firm, sells for less than $9 per share, has a forward PE of 7.5, and sports a yield of 9.9%.

For a list of more than a dozen stocks that pay yields in excess of 4% and sell for less than $10 per share, go to Keep in mind, very high yields may not be sustainable and may be indicative of higher risk.

Disclosure: Author didn't own any of the above at the time the article was written.


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