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10 Undervalued Dividend-Paying Stocks With Momentum

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Handsome dividends and an upward trajectory make cheap stocks look even cheaper.

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MINYANVILLE ORIGINAL In these dog days of summer, stocks aren't moving too much. Here are a few companies in the S&P 500 (SPY) that are could be very good for sitting back and collecting dividends.

These 10 companies have a much lower price-to-earnings (P/E) ratio than the average of 17.2 for the S&P 500 index, all have a dividend yield of over 3%, and some have been on a tear this year.

10. Intel (INTC)
P/E Ratio: 11.6
Dividend yield: 3.42%
One-month performance: +2.65%

9. Eaton Corp. (ETN)
P/E Ratio: 11.09
Dividend yield: 3.28%
One-month performance: +17.9%

8. ConocoPhillips (COP)
P/E Ratio: 11.08
Dividend yield: 4.60%
One-month performance: +$1.84

7. Lockheed Martin (LMT)
P/E Ratio: 10.82
Dividend yield: 4.33%
One-month performance: +6.36%

Like General Dynamics (GD) and Northrup Grumman (NOC) listed below, there is some fear out there that defense contracts will disappear on New Year's Day if Congress allows the country to tip over the "fiscal cliff," but additional stopgaps are more likely than that.

6. PPL Corporation (PPL)
P/E Ratio: 9.97
Dividend yield: 4.90%
One-month performance: +1.52%

5. Raytheon Co. (RTN)
P/E Ratio: 9.78
Dividend yield: 3.56%
One-month performance: +0.66%

4. General Dynamics (GD)
P/E Ratio: 9.59
Dividend yield: 3.11%
One-month performance: +1.57%

3. Northrup Grumman (NOC)
P/E Ratio: 8.89
Dividend yield: 3.17%
One-month performance: +7.54%

2. JPMorgan Chase (JPM)
P/E Ratio: 8.33
Dividend yield: 3.24%
One-month performance: +10.27%

JPMorgan Chase's stock price is 12.48% higher than it was at the start of the year, and that is even with the sell-off precipitated by the bank's disclosure of a $5.8 billion trading loss in May. We still have yet to see whether restatements of previous statements really wreck the company's financials. Even with a loss north of $4 billion in the second quarter, JPMorgan's share price is still low, compared to earnings. Bank of America (BAC) has a similar P/E ratio of 8.82, but doesn't share nearly as much with stockholders.

1. Seagate Technology (STX)
P/E Ratio: 5.53
Dividend yield: 3.59%
One-month performance: +30.6%

Today, Stiefel Nicolaus analysts downgraded this Irish company from a Buy to a Hold, following similar actions by Robert Baird and Barclays earlier this summer. Seagate has raised its dividend from $0.18 last year to $0.32 in the latest quarter. Since the beginning of the year, Seagate's share price has gone up over 100%.

Twitter: @vincent_trivett
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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