13 Low Volatility, Under-Valued, High Yield Stocks

I often look for higher capitalized stocks which give me a margin of safety. I don’t talk about a discount to the fair value or cheap prices. I mean a low volatility stocks. Stocks with a low beta ratio have a lower volatility than the whole market but they also have a lower upside potential if the market goes up.

If the low beta stocks also have a low valuation, it could be interesting. You can find a full list of higher capitalized high-yield stocks with low beta ratios below. In total, there are 13 companies with a market capitalization over USD 2 billion and a yield above the 5 percent mark that have beta ratios of less than 0.5 and a forward P/E of less than 15.

The results are dominated by residential REITS. I personally don’t like this investment category. Sure, you can make money with it but growth is very capital intensive. You sit on your investment and wait for rental price increases or decreasing vacancy rates. That’s not very fun for a long-term growth investor like me. As you see, there is also a huge debt burden on the stocks which exceeds the amount of equity by a few factors. Gas utilities and my favorites from the cigarette industry are much more interesting.

Five of the results have a very high yield, of more than 10 percent; Seven have a current buy or better recommendation.

AmeriGas Partners (APU) has a market capitalization of $3.65 billion. The company employs 8,660 people, generates revenue of $2.921 billion and has a net income of $12.67 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $307.52 million. The EBITDA margin is 10.53 percent (the operating margin is 5.38 percent and the net profit margin 0.43 percent).

Financial Analysis: The total debt represents 52.64 percent of the company’s assets and the total debt in relation to the equity amounts to 166.40 percent. Due to the financial situation, a return on equity of -1.05 percent was realized. Twelve trailing months earnings per share reached a value of $0.75. Last fiscal year, the company paid $3.10 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 52.43, the P/S ratio is 1.25 and the P/B ratio is finally 2.59. The dividend yield amounts to 8.13 percent and the beta ratio has a value of 0.33.






Altria Group (MO) has a market capitalization of $66.38 billion. The company employs 9,900 people, generates revenue of $23.800 billion and has a net income of $3.393 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.321 billion. The EBITDA margin is 26.56 percent (the operating margin is 25.50 percent and the net profit margin 14.26 percent).

Financial Analysis: The total debt represents 37.04 percent of the company’s assets and the total debt in relation to the equity amounts to 371.98 percent. Due to the financial situation, a return on equity of 76.13 percent was realized. Twelve trailing months earnings per share reached a value of $1.92. Last fiscal year, the company paid $1.58 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.08, the P/S ratio is 2.79 and the P/B ratio is finally 18.21. The dividend yield amounts to 5.37 percent and the beta ratio has a value of 0.42.






Entergy Corporation (ETR) has a market capitalization of $11.26 billion. The company employs 14,682 people, generates revenue of $11.229 billion and has a net income of $1.367 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.115 billion. The EBITDA margin is 27.74 percent (the operating margin is 17.93 percent and the net profit margin 12.18 percent).

Financial Analysis: The total debt represents 30.43 percent of the company’s assets and the total debt in relation to the equity amounts to 134.03 percent. Due to the financial situation, a return on equity of 15.43 percent was realized. Twelve trailing months earnings per share reached a value of $3.96. Last fiscal year, the company paid $3.32 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.99, the P/S ratio is 1.00 and the P/B ratio is finally 1.25. The dividend yield amounts to 5.24 percent and the beta ratio has a value of 0.48.






Take a closer look at the full list of the safest high-yield stocks at the market. The average P/E ratio amounts to 19.98 and forward P/E ratio is 10.69. The dividend yield has a value of 9.25 percent. Price to book ratio is 2.65 and price to sales ratio 3.97. The operating margin amounts to 34.33 percent and the beta ratio is 0.37. Stocks from the list have an average debt to equity ratio of 3.51.

Here is the full table with some fundamentals (TTM):


Related stock ticker symbols:
AGNC, ARR, CYS, NLY, HTS, MFA, SPH, APU, CLMT, FE, MO, LO, ETR

Disclosure: I am long MO, LO. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.