Explore these dividend stocks under $10.
Cheap dividend stocks are attractive because investors can buy a substantial amount of shares. With companies like Amazon.com (ticker: AMZN) trading for thousands of dollars, it’s appealing to some folks to be able to buy in lots of 100 instead of one or two shares. The following nine cheap dividend stocks all offer share prices less than $10 to accommodate this strategy; however, investors should be aware that this often comes with some trade-offs — such as volatile share prices or less frequent payouts. Still, if you’re interested in the best dividend stocks trading for less than $10 as of yesterday’s market close, here are nine dividend stocks to consider.
ADT (ADT)
Though home security firm ADT offers the smallest overall yield on this list — as other picks pay more than 9% annually — its payday is still more than the roughly 1.41% yield for the S&P 500 at present. What’s more, with a forecast of $1.10 in total earnings for the fiscal year but a quarterly payout that tallies just 3.5 cents, there is tremendous potential upside for payouts over the long term. Shares have been trading around the $9 range lately, but a strong fourth-quarter earnings report in February showed a double-digit increase in recurring monthly revenue and growth in net subscribers to its services. That bodes well for continued upside in this cheap dividend stock.
Current yield: 1.57%
Aegon N.V. (AEG)
Never heard of Aegon? Well, with shares that have surged more than 20% year to date in 2021 (but still trade for less than $5), you may want to learn about this company. AEG is no small fry, as it’s a $10 billion financial firm that is one of the most respected asset managers in Europe, with a focus mainly on insurance, pensions and investing services worldwide. This mix allows it to profit from cyclical upturns like some big banks, and more importantly for income investors, the company’s regular stream of cash from premiums and pension funds ensures reliable performance to support its dividend payments. Just beware that as a foreign dividend stock, AEG doesn’t stick to the fixed quarterly cycle like U.S. dividend payers and only pays two distributions each year that can vary significantly in size.
Current yield: 3%
Annaly Capital Management (NLY)
A diversified capital manager, Annaly Capital Management invests in residential and commercial assets primarily through mortgage-backed debt and similar securities. This cheap dividend stock took a big hit in early 2020 on pandemic fears, but it has rebounded from its March 2020 lows. Furthermore, the rebound has been sustained as shares logged 8% gains in the last few months, roughly in line with the S&P 500. Payouts are holding steady at 22 cents a quarter, and investors can rely on the massive portfolio of real estate investments to keep generating a decent flow of cash — and deliver tremendous yield despite a low share price.
Current yield: 10.1%
Enable Midstream Partners (ENBL)
Like many energy stocks, Enable took a bit of a tumble last year as pandemic disruptions sapped oil and gas demand and caused prices to drop. ENBL weathered the storm better than most, thanks in part to its “midstream” model. As the term implies, the company is in the middle between exploration firms and the refiners and wholesalers that are at the end of the supply chain. As a glorified toll collector in the energy-rich areas of the Dakotas and Oklahoma, as long as someone is drilling there’s a good chance that ENBL will be helping them move those fuels around. That provided a nice foundation for revenue even during the worst of the pandemic and continues to fuel a reliable and generous dividend.
Current yield: 9.94%
Pitney Bowes (PBI)
Pitney Bowes is one of those companies that was very popular in decades past but has struggled to keep up with the times. Though it currently bills itself as a technology and e-commerce solutions company, the fact remains that PBI was and still remains a company that is concerned with physical mailing. In fact, co-founder Arthur Pitney invented one of the first commercial postage meters about 100 years ago. While there is still some money to be made in direct marketing services via mail and parcel-related logistics, the truth is that PBI is a much smaller version of itself than it was decades ago. The good news is that shares have been beaten down to single digits, and they now appear to have found their footing. The $1.4 billion company is actually up 375% in the last 12 months — proving that there’s still value here for shareholders beyond its steady dividend payments.
Current yield: 2.32%
Prospect Capital Corp. (PSEC)
Recently highlighted as one of the most generous monthly dividend stocks on Wall Street, Prospect Capital is also incredibly affordable on a per-share basis right now. But don’t think that means this stock is in a death spiral, as shares have exploded higher from their 2020 lows to hit their highest point since 2017. PSEC has a diverse portfolio of investments that includes everything from consumer goods manufacturers to energy companies to health care firms, which helps to provide a bit of stability to its monthly 6-cent dividend. Its focus on investments in smaller companies also means it is in the perfect position to capitalize from the post-pandemic recovery as the U.S. economy slowly returns to normal in 2021.
Current yield: 9.1%
SunCoke Energy (SXC)
SunCoke is the smallest company on this list of cheap dividend stocks. SXC is a coal company, but not the kind of coal you might think. It operates primarily as an independent producer of “coking” coal that is used in the metals industry in the Americas and Brazil. While the company does provide some coal for electric utilities still, its metallurgical operations are the real draw here for investors. After all, steel is a compound made of two things — iron and carbon. So as long as the world needs steel, SunCoke will find ample demand for its carbon-rich coking coal. A small and focused company like this is not without its risks, but don’t be scared off because you fear the movement away from coal-based utility operations as a response to climate change. The fact that shares are up more than 80% in the last 12 months even as green energy policies continue to advance is proof this company can still do well in 2021 and beyond.
Current yield: 3.63%
Telefonica S.A. (TEF)
Another overseas dividend payer that is cheap on a per-share basis is Spanish telecommunications giant Telefonica. Though based in Madrid and operating a dominant network of wireless communications and home telephone and internet access in the region, the $25 billion business also operates in Central and South America to give it a bit of a growth flavor, too. The company only paid one dividend in all of 2020, so like the other foreign stocks on this list you may not get a steady stream of smaller payments as you would from U.S. stocks. However, that 24-cent payday annualizes to a yield that is more than three times the typical S&P 500 company at present — making TEF worth a look despite its infrequent distributions.
Current yield: 5.22%
Two Harbors Investment Corp. (TWO)
Two Harbors is structured as a real estate investment trust, or REIT. This special class of corporation must deliver 90% of its taxable income back to shareholders, creating a mandate for juicy dividends. However, TWO is a curiosity as it doesn’t own physical real estate — just mortgage “paper” and related assets. Considering the red-hot housing market lately, that has been a very good sector to be in over the last year or so. If you want to see the potential of Two Harbors in cold, hard numbers, then check out these two figures: In April 2020, TWO was paying just 5-cent dividend but has more than tripled that to 17 cents per quarter at present. At the same time, over the last 12 months, its stock has surged 100%. Shares are still trading for less than $8 apiece at present, however, so this high-flying dividend stock is still relatively affordable.
Current yield: 9.24%
Nine of the best cheap dividend stocks to buy:
— ADT (ADT)
— Aegon N.V. (AEG)
— Annaly Capital Management (NLY)
— Enable Midstream Partners (ENBL)
— Pitney Bowes (PBI)
— Prospect Capital Corp. (PSEC)
— SunCoke Energy (SXC)
— Telefonica S.A. (TEF)
— Two Harbors Investment Corp. (TWO)
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9 Best Dividend Stocks to Buy Under $10 originally appeared on usnews.com
Update 04/08/21: This story was published at an earlier date and has been updated with new information.
