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4 Stunning Dividend Stocks: SSE PLC, BAE Systems plc, Beazley PLC And Amlin plc

SSE

2015 has been a tough couple of weeks so far for investors in SSE (LSE: SSE) (NASDAQOTH: SSEZY.US), with the domestic energy supplier seeing its share price fall by over 8% since the turn of the year. A major reason for this is renewed political pressure regarding its pricing, with the Labour party tabling emergency legislation to try and get domestic energy companies to pass on lower costs to consumers. For SSE, this is a potential problem because it has already hedged much of its energy requirements for the year in order to fulfil its self-imposed price freeze.

Despite this, shares in the company still offer great appeal as an income play. That’s because they yield a hugely enticing 6% and, with a price to earnings (P/E) ratio of just 12.4, much of the political risk from a change in government seems to be adequately priced in.

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BAE

One of the great appeals of BAE (LSE: BA) is the high barriers to entry that are present in the defence industry. This allows the incumbents, such as BAE, to maximise margins and deliver relatively sustainable profitability over the long term. For example, BAE has a strong track record of profitability, with its bottom line occupying a narrow range of between 38p and 45p per share in the last four years.

This relative predictability, coupled with a sound financial footing (BAE has a debt to equity ratio of just 74%) make BAE a sound defensive play. This, when combined with a yield of 4.4%, highlights BAE’s potential as an income play and, as a result, it holds great appeal for income-seeking investors.

Beazley

Although insurance companies are, by their very nature, more volatile than most companies due to fluctuating claims experiences, they can still make for excellent dividend plays. For example, Beazley (LSE: BEZ) currently yields an impressive 3.9% and offers excellent value for money – even though its share price has risen by 9% in the last three months.

For example, Beazley trades on a P/E ratio of just 11.7 and, when you consider that the FTSE 250 (to which Beazley belongs) trades on a P/E ratio of 18.3, it’s clear to see that even a modest narrowing of the valuation gap could lead to a substantial price rise on the part of Beazley. This, coupled with the fact that it has increased dividends per share in each of the last four years, makes Beazley a strong income play.

Amlin

However, when it comes to high yield insurance stocks, few can beat Beazley’s FTSE 250 stable mate, Amlin (LSE: AML). It yields 5.9% at its current price level and, like Beazley, has seen investor sentiment pick up sharply in recent months, with its shares being priced 12% higher now than they were in mid-October.

Looking Ahead, Amlin is expected to increase dividends per share by around eight times the current rate of inflation, with them set to be 4.3% higher in 2016 than in the current year. This could push Amlin’s yield to around 6.2%, which could improve market sentiment further and push the company’s share price even higher. As such, now could prove to be the right time to add a slice of the company to your portfolio.

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Peter Stephens owns shares of Amlin, BAE Systems, and SSE. The Motley Fool UK has recommended Beazley. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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