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3 embarrassingly-cheap dividend stocks (with 5% yields) I’d buy today

In a recent article, I discussed Bakkavor Group and explained why it’s a dividend share that’s trading much too cheaply. Here, I’m looking at another cluster of low-cost income heroes worthy of your attention today. Come take a look.

A brilliant bet

William Hill (LSE: WMH) is up against it right now. The bookmaker suffered an eye-watering profits fall last year as it suffered from fresh regulatory action in the UK and the reduction of maximum stakes on fixed-odds betting machines.

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It’s going to take some time for the FTSE 250 to adjust to these changes and the lost revenues from its money-spinning machines. It’s why City analysts are expecting another big bottom-line drop (by 48%) in 2019.

On the plus side, though, it could be argued William Hill’s low forward P/E ratio of 14.6 times bakes in these troubles. And given the company’s longer-term outlook remains strong, underpinned by the international rollout of its online operations, and in particular its drive into the US, I reckon this makes it a great value pick.

City analysts expect earnings growth to return in 2020 and that William Hill can therefore afford to keep paying big dividends in the meantime. This means that the dividend yield for this year sits at a princely 5.6%.

Poised to jump?

Tyman (LSE: TYMN) has proved itself to be a great dividend grower over the past half a decade, thanks to solid and sustained profits growth over that period.

It’s hardly front page news that City analysts, in forecasting extra bottom-line progress through to the close of next year (a 7% rise is predicted for 2019), are also expecting shareholder payouts to keep rising through this period too. And for this year this leaves a big 5.1% yield.

The investment community remains reluctant to buy the door and window component manufacturer because of the poor condition of the US newbuild market. But with home loan conditions there improving of late, it’s possible that Tyman’s end markets will begin to improve, giving room for its share price to surge again.

The small-cap’s low prospective P/E multiple of 8.6 times could provide further ammunition for bouts of fresh buying activity too.

One last great buy

My final selection is Charles Taylor (LSE: CTR), a splendid momentum stock which offers a chunky 5% forward yield. The professional insurance services provider is expected to endure a small earnings reversal in 2019. But thanks to its strong long-term outlook it’s predicted to keep lifting dividends.

Charles Taylor’s profits might have been pummelled by a series of exceptional costs last year but the pain it endured should go some way to help it achieve its long-term objectives.

Acquisitions made in the last year include those of claims services specialists FGR of Chile and Aasgard Summit in the US, moves that help the small-cap in its quest to become “a joined-up claims services business with global scale.” And its presence in Latin America was given an almighty boost with the purchase of technology and software giant Inworx too.

At current prices, Charles Taylor boasts a prospective P/E ratio of 9.2 times. In light of its exciting growth strategy, I would consider the insurance services star far too cheap right now and therefore an exceptional buy.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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