Big income potential from these cheap stocks.
Many investors are daunted by the share price of some of Wall Street’s biggest names. Amazon.com (ticker: AMZN) may be a force to be reckoned with, but it’s also trading for roughly $1,600 a share, which means if you only have a few hundred dollars to invest, you’re shut out. Cheap stocks, particularly those less than $10, have appeal. You can buy 100 shares and have a real stake. Whether one share or 100, the important thing is to focus on the quality of the investment and not just the share price. Here are nine dividend stocks that offer big yields but have low stock prices.
Evolution Petroleum Corp. (EPM)
Evolution is a Texas-based oil and gas exploration company that operates onshore, mainly in Louisiana. The small-cap company suffered mightily as oil crashed from highs topping $100 per barrel in 2014 to lows of less than $30 in 2016. However, the company fought to keep paying dividends, and even though its share price isn’t quite back to where it was several years ago and remains just shy of $10 a share, it is up 30 percent in the last six months and looking to move higher.
Current yield: 3.4 percent
Oxford Square Capital Corp. (OXSQ)
Oxford Square is a small investment firm known as a business development company, or BDC. Think of these investments as a kind of hybrid between publicly traded corporations and private equity funds. Oxford Square looks to turn a profit through debt and equity investments, and then returns a share of the profits to shareholders. That share of profits depends wholly on the performance of the underlying investments, but Oxford’s focus on software and tech companies has been successful as of late, as evidenced by a more than 20 percent run since Jan. 1 and its double-digit distribution to shareholders.
Current yield: 11.3 percent
FS Investment Corp. (FSIC)
Another low-priced BDC worth a look is FSIC, a nearly $2 billion corporation that invests in senior debt. This sometimes doesn’t have as much upside as a stake in the future of a business, but there’s a lot to be said for the stability of a top creditor who will be made whole regardless of who else is in line. FS Investment has almost two thirds of its portfolio in prioritized debt, classified as “first lien” senior secured loans. It also is up about 5 percent in 2018, on top of offering a generous yield, too.
Current yield: 10.6 percent
Ashford Hospitality Trust (AHT)
This hotel operator owns properties under the Marriott, Hyatt and Westin brands, among others. With a focus on luxury and “upper upscale” locations that can command premium pricing, the margins are good, and with consumer spending and business confidence at record levels, Ashford has no problem keeping occupancy rates high these days. Structured as a real estate investment trust, AHT must pass on 90 percent of its taxable income to shareholders. This mandate for big dividends fuels a steady stream of income from this low-priced stock.
Current yield: 7 percent
Arbor Realty Trust (ABR)
Like Ashford, Arbor is structured as a REIT. However, this $800 million real estate-oriented business is focused on lending instead of actual properties. Commercial mortgage servicing, loans for apartment construction and originating conventional residential housing loans are a few elements of its business. Much like you can depend on the monthly bills coming like clockwork, Arbor can depend on getting monthly checks from borrowers like clockwork, too. That fuels consistent dividend payments from this low-priced stock.
Current yield: 8.8 percent
National CineMedia (NCMI)
The silver screen isn’t what it used to be, with Americans opting for the comforts of home instead of spending at the movie theater. But after a rough few years, 2018 is shaping up to be a good year for cinemas, which has lifted movie advertisement platform National CineMedia. The firm partners with advertisers to serve up ads in the lobby and before the movies at thousands of theaters nationwide. And thanks in part to a recent surge in ticket sales, NCMI stock is up a handy 40 percent from its early 2018 lows.
Current yield: 10.9 percent
Oaktree Specialty Lending Corp. (OCSL)
Oaktree is a finance company that tries to connect companies with the credit they need to succeed and charges interest on specialty loans. It’s an important part of helping the economy function. OCSL currently has more than $120 billion in assets under management, the vast majority in credit-related strategies that involve hand-picked loans. The results have been encouraging, resulting in a dividend yield that is about three times that of the typical S&P 500 component and a share price that is up more than 15 percent in the last 12 months.
Current yield: 7.7 percent
New Senior Investment Group (SNR)
Structured as a REIT, New Senior is one of the most reliable companies you’ll find. That’s because its focus is on senior housing properties, with more than 130 properties in 37 states. There are few sure things in life, but growing old is one. That’s particularly true in 2018, as the aging baby boomer generation is expected to reshape demographics. The government projects the number of U.S. residents older than 65 to double from 50 million in 2015 to 100 million by 2060 — and companies like SNR are certain to capitalize on this trend.
Current yield: 13.2 percent
Entravision Communications (EVC)
Entravision is a Spanish-language broadcaster located in Southern California, serving some 55 television markets and almost as many radio markets. The company covers both the U.S. and Latin American markets, including Mexico and Argentina. While there is admittedly not much growth in the broadcast market broadly in the age of streaming video, Entravision is remarkably stable thanks to a niche focus that is unmet by other providers. Additionally, its 5-cent quarterly dividend is up significantly from 3.1 cents a year and a half ago, so income investors should be encouraged by this commitment to larger payouts.
Current yield: 4.1 percent
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9 Cheap Dividend Stocks for Bargain Hunters originally appeared on usnews.com
