This week, the S&P 500 broke out to its highest level in nearly a year. With stocks once again near all-time highs, dividend stocks General Motors (GM), Valero Energy (VLO) and LyondellBasell (LYB) all still provide both major value and huge dividends.
General Motors (GM)
When it comes to dividend stocks with limited downside, GM may have the best example of a value floor in the entire market. Even with the market approaching all-time highs, GM currently trades at a forward P/E of just 5.0.
In addition, GM pays a hefty 5.0% dividend. Even if the market (and GM stock) fails to break out to new highs and stays in a sideways range, GM investors will be getting paid 5.0% to wait on the next leg up. That high yield looks even better now that the recent jobs report may have thrown a wrench into the Federal Reserve’s plan to raise interest rates again in June. Quality dividend stocks like GM are hard to find.
GM’s value creates an opportunity for traders outside of its dividend. The 17 Wall Street analysts currently covering GM see an average of 31% upside for the stock.
If you’re looking for a potential catalyst with low market expectations, electric cars could be GM’s next needle-mover. With GM’s Bolt EV set to begin shipping later this year, GM will likely beat Tesla Motors Inc (TSLA)’s Model 3 to the mass electric vehicle market by at least a year.
Finally, like the other two names mentioned below, GM’s stock is now even cheaper than it was a year ago.
Valero Energy (VLO)
Most investments in the oil industry are based…
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