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Top 10 Dividend Yields, Lowest P/S, and Lowest P/B in MFI

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August 18, 2010 – Comments (0) | RELATED TICKERS: COCO , LLY , RAI

Every so often, MagicDiligence compiles a list of Magic Formula stocks sorted by their dividend yield, price-to-sales ratio, and price-to-book ratio for investors that like to use those metrics. The result is a list of attractive value stocks for additional research.

Dividend Yield

Dividend yield is a favorite metric for income investors, providing both steady, predictable returns and downside protection. With Magic Formula Investing, you are also buying dividend stocks that are both cheap against earnings and represent a company that efficiently invests capital. The Top 10 Magic Formula highest dividend yield stocks (forward yield) right now are:

1) CHKE - Cherokee, Inc.: 8.70%
2) ELNK - EarthLink Inc: 7.50%
3) RAI - Reynolds American Inc: 6.40%
4) VALU - Value Line Inc: 5.60%
5) GRMN - Garmin Ltd: 5.50%
6) LLY - Eli Lilly and Co: 5.50%
7) LO - Lorillard Inc: 5.30%
8) HRB - Block (H&R) Inc.: 4.20%
9) LMT - Lockheed Martin Corp: 3.50%
10) RTN- Raytheon Co.: 3.40%

Price-to-Sales Ratio

Using the price-to-sales ratio was a tactic shown to be highly successful by such guru investors as Ken Fisher in Super Stocks and by James O'Shaughnessy in What Works on Wall Street. The Top 10 Magic Formula stocks with lowest price-to-sales ratios are:

1) ABC - AmerisourceBergen Corp: 0.10
2) MCK - McKesson Corp: 0.15
3) UIS - Unisys Corp: 0.22
4) PRSC - Providence Service Corp (The): 0.22
5) OSK - Oshkosh Corp: 0.27
6) COCO - Corinthian Colleges Inc.: 0.28
7) EME - EMCOR Group Inc.: 0.30
8) GME - GameStop Corp.: 0.33
9) KBR - KBR Inc: 0.33
10) AHCI - Allied Healthcare International Inc.: 0.35

Price-to-Book Ratio

Finally, the price-to-book ratio is often considered the "classic" test of value investing: are you buying a company at or less than the net value of its assets? Price-to-book ratio was a favorite of the "father" of value investing, Ben Graham. The top 10 Magic Formula stocks with lowest price-to-book ratio are:

1) AHCI - Allied Healthcare International Inc.: 0.66
2) COCO - Corinthian Colleges Inc.: 0.70
3) MPAA - Motorcar Parts of America Inc: 0.83
4) JGBO - Jiangbo Pharmaceuticals Inc: 0.86
5) SUPG - SuperGen Inc: 1.11
6) ARRS - Arris Group Inc: 1.11
7) GME - GameStop Corp.: 1.13
8) AOL - AOL Inc: 1.15
9) AGX - Argan Inc: 1.18
10) WDC - Western Digital Corp: 1.21

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