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I'm looking to pick up some of the best passive income stocks at rock-bottom prices. Here's why now might be the time to buy these particular dividend stocks.
green machine
At 88 euro cents per share, the renewable energy stock Greencoat renewable energies (LSE:GRP) has a huge dividend yield of 7.7%. Meanwhile, its price-to-earnings (P/E) ratio is just 9.9 times.
But why is it sold so cheap? Well, high interest rates are a problem for companies like this, and could continue to be if central banks don't implement a series of cuts in the coming months.
This would keep pressure on net asset values (NAVs) and, consequently, companies' profits. But I think this threat is built into Greencoat Renewables' low share price.
The company also trades with a forward price-to-book (P/B) value of less than one.0.8. This indicates that it is trading at a discount to the value of its assets.
I believe Greencoat, which sells clean energy from its wind farms, primarily in Ireland, has significant long-term growth and revenue potential as the shift from fossil fuels to renewable energy accelerates.
10% dividend yield
I believe M&G (LSE:MNG) shares also look like a bargain at current levels of 201p. And that is not only because its forward dividend yield of 10% is one of the highest in the market. FTSE 100.
The financial services giant is also trading on a P/E ratio of 9.6 times for this year. In addition to this, its price-earnings growth (PEG) ratio is 0.1.
As with the P/B ratio, a reading below one suggests a stock is undervalued.
Uncertainty over interest rates is also a problem for M&G in the short term. In addition to affecting your assets under management, a higher-than-normal rate environment also reduces the amount consumers spend on financial services.
However, I think the long-term benefits of owning M&G shares still make them an attractive investment. I am confident that its sales will increase considerably as the average age of the population increases and concerns about pensioner benefits steadily intensify.
Bouncing
MOTThe (LSE:ITV) share price has soared in 2024. And yet, at 78.7p per share, investors can still enjoy exceptional value today.
He FTSE 250 The company trades on a forward price-to-earnings ratio of 8.8 times. It also offers a dividend yield of 6.3%.
As with any commercial broadcaster, ITV's profits are very sensitive to conditions in the wider advertising market. Although they have improved recently, things may remain difficult if interest rates do not change and the UK economy remains weak.
However, there are still many things to like about the business from an investment perspective. Its ITV Studios division continues to deliver products and is expected to generate average organic revenue growth of 5% between 2021 and 2026.
The company's ITVX streaming division also continues to perform strongly, with total viewing hours increasing 16% in the first quarter to 449 million hours. There are risks here, but overall I think it's a great passive income stock to consider.
