Triple-Play Stocks

Looking for dividend-paying shares with solid fundamentals and a reasonable price? These 29 names fit the bill

By Numer de Guia, CFA

Suppose you could uncover a list of top-ranked stocks that have attractive valuations. And suppose those stocks also paid dividends at an above-average yield. Sound good? Then your list might just look like the contents of this week's screen.

Think of it as a three-pronged approach. First, we wanted to look for stocks with solid fundamentals. We started with the list of companies ranked 5 STARS (buy) by analysts from Standard & Poor's Equity Research. Stocks with that designation are expected to post a total return that beats the benchmark S&P 500 index by a wide margin, with shares rising in price on an absolute basis.

Next, we wanted to make the case for these stocks based on valuation. We sifted for those issues with lower p-e ratios than the 20.9 average for the S&P 500.

Finally, we looked for something to interest investors who like dividend-paying stocks. We sorted for those issues with a higher indicated dividend yield than the 1.69% average for the S&P 500. Our search turned up these 29 names:

Company Ticker
Allstate ALL
Alltel AT
Anheuser-Busch BUD
Annaly Mortage NLY
Bank Of America BAC
BCE Inc. BCE
Burlington Northern Santa Fe BNI
ChevronTexaco CVX
China Mobile Hong Kong CHL
China Petroleum & Chem SNP
Citigroup C
Constellation Energy CEG
Deere & Co. DE
Dow Chemical DOW
Endesa ELE
Eni E
Exxon Mobil XOM
Fifth Third Bancorp FITB
Fortune Brands FO
Hartford Finaical Services HIG
Huaneng Power HNP
Indymac Bancorp NDE
Johnson & Johnson JNJ
MBNA Corp. KRB
National City NCC
Southtrust SOTR
U S Bancorp USB
UST Inc. UST
Wachovia WB

De Guia is an analyst for Standard & Poor's Portfolio Services

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