4 Stocks With High Dividend Yield, Low P/E And High ROE For Investment

The Nifty has fallen near 16% from 52-week highs and this has resulted in stocks becoming slightly more attractive in terms of valuations. Here are 4 stocks with a high dividend yield, low p/e and high ROE.

REC

This stock has a mix of everything, a low price to earnings ratio of just 2.2 times and a robust dividend yield in excess of 11%. Apart from this, the 3-year average returns on capital employed is nearly 29%. Fundamentally, it cannot get better than this. However, markets have a mind of their own and discount stocks accordingly. REC is a government owned enterprise and perhaps one of the reasons why the discounting is so low. However, for those looking for stupendous dividend yields it cannot get better than this. The shares of REC are trading at Rs 113 and the stock has also hit a 52-week high of Rs 162.

CoaL India

Coal India is another stock like REC, which gives a good dividend yield. In fact, the stock gives a dividend yield of nearly 9%. The stock has given a 3-year average returns on capital employed of nearly 20%. The current market price of the stock is around that 192 levels. The price to earnings ratio of the company is way below its 10-year average and is currently trading at a p/e of just 6 times trailing EPS.

Tata Steel

With a price to earnings ratio of 4 times, shares in Tata Steel are not too expensive. However, one thing to note is that steel prices have fallen and that this year the EPS may not be as high as last year. However, there are a few positives for the stock, including the fact that it is trading with a stock split. So, investors will get a higher number of shares once the stock slit happens in the ratio of 1:10 and there is a possibility of share price moving higher because of better liquidity.

PFC

PFC is a government enterprise that is engaged in power financing. The shares of the company are trading at a p/e of 2 times, with a dividend yield of more than 10%. However, the company's shares just went ex dividend. The 3-year average returns on capital employed have been more than 30%. It's good to buy these shares if you are a long-term investor, particularly if you are looking at dividends. We believe that the company would continue to maintain its dividend track record in the coming days.