3 Cheap Dividend Stocks to Buy Yielding 4% or More [Video]

David Sekera: Hi, I’m Dave Sekera, chief US market strategist with Morningstar Research Services. This week I’m filling in for Susan Dziubinski.

For investors looking for a relatively high dividend yield, that doesn’t mean you have to give up looking for stocks that trade at a discount to their intrinsic valuation.

1. Verizon Communications VZ
2. Kinder Morgan KMI
3. WEC Energy WEC

For example, Verizon Communications is rated 4 stars, trades at an approximate 25% discount to our fair value estimate, and its dividend provides investors with an almost 6.7% yield. We rate the company with a narrow economic moat based on its cost advantages and the industry’s efficient scale characteristics.

Following consolidation within the industry over the past several years, we expect that wireless carriers will begin to act more like an oligopoly. What this means is that they will compete less on price, which in turn will allow Verizon to expand its operating margin …