2 of the Cheapest Stocks I Own
The price-to-earnings ratio is the usual go-to valuation metric for stocks, but earnings can be incredibly volatile, limiting the value of this ratio for long-term investors. That's why I prefer a metric based on something a bit more consistent -- like dividends. Simply put, when a reliable long-term dividend payer's yield is historically high, I want to do a deep dive.
Right now, Hormel Foods (NYSE: HRL) and Clorox (NYSE: CLX) fall into this category. Here's why you might want to own them, just like I do.
Hormel's roughly 2% yield is toward the high end of its historical range. To be fair, I bought when the yield was a bit over 2%, but that doesn't materially alter that fact that this iconic food maker looks fairly cheap compared to its history. The dividend, meanwhile, has been increased for an incredible five decades, making Hormel a Dividend King.
Source Fool.com
