Explore these dividend stocks under $10.
If you’re looking for cheap dividend stocks, one thing is important to remember above all else: Many stocks have a low price for a reason. However, some investors are reluctant to buy a stock like Amazon.com (ticker: AMZN) that costs more than $3,000 for a single share. They would rather buy a stock with a low nominal price that they can purchase in large quantities instead of scooping up just a handful of 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 low growth prospects 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.
Aegon N.V. (AEG)
Aegon isn’t exactly a household name for U.S. investors, but the nearly $9 billion financial firm is one of the most respected asset managers in Europe and makes for an intriguing dividend stock trading for less than $10. Netherlands-based Aegon focuses on insurance, pensions and investing services worldwide. This mix allows it to profit from cyclical upturns like some big banks, but more importantly, the company’s regular stream of cash from premiums and pension funds ensures reliable performance to support its dividend payments. Like some other stocks on this list, it doesn’t stick to the fixed quarterly cycle like U.S. dividend payers, as it only pays two distributions each year that vary in size. That said, when you add up its total 2020 payout, that still equals a generous yield at its current price.
Current yield: 5.8%
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 more than doubled since its March lows. Furthermore, the rebound has been sustained as shares logged more than 15% gains in the last three months to outperform the broader Standard & Poor’s 500 index. 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: 11.1%
ASE Technology (ASX)
ASE is a Taiwan-based technology company that provides a range of semiconductor services including packaging, testing and manufacturing. This is not a company that has proprietary chip designs, but rather it’s a foundry that takes orders from third parties who don’t have their own facilities or the desire to run manufacturing operations. Admittedly, ASX stock only pays its dividends once a year, but the nearly 14 cents it paid shareholders in August makes for a yield better than the typical S&P 500 stock. Furthermore, shares have exploded 90% higher in the last two years, so there’s a good chance those payouts could continue to grow in 2021 and beyond.
Current yield: 2.1%
Enerplus Corp. (ERF)
Enerplus Corp. is a crude oil and natural gas exploration company operating in the U.S. and Canada. The company went on quite a ride in 2020 thanks to volatile energy prices, but it still managed to keep paying a dividend of just less than a penny per share each month — which, as the stock trades for less than $4, adds up to a decent annualized yield. ERF shares may be volatile in 2021, like other oil and gas stocks, but the good news is with energy prices firming up lately, it has jumped by more than 80% in the last few months, and momentum seems to be decidedly strong at this moment in time.
Current yield: 2.5%
Grupo Aval Acciones y Valores S.A. (AVAL)
Don’t be intimidated by Colombia’s Grupo Aval just because of the name. The business of this roughly $8 billion company should feel very familiar, as it provides a range of financial services across Central America. These include checking and savings accounts, mortgage loans, credit cards and payroll services that are provided out of a network of roughly 1,692 branches and 5,671 ATMs. Simply put, AVAL is a regional bank — but its region just happens to be Central America. Dividend investors are often drawn to midsized financial stocks like this that have large enough operations to be stable but don’t get involved in risky proprietary trading like aggressive U.S. megabanks. The low price, strong yield and short-term momentum with around 50% gains since October make this pick worth a look.
Current yield: 4.7%
More than a century old, Pearson is one of the largest providers of educational products and services in the world. The company is based in London, but it operates in more than 70 countries through businesses including traditional courseware such as textbooks along with test development services, grading platforms and online learning tools. In the wake of a pandemic that has prompted a lot of at-home learning, those digital segments are particularly interesting in 2021. Pearson has grown into the largest digital-learning company by revenue. As the demand for schooling is constant, Pearson enjoys a reliable cash flow. Dividends are biannual, but they add up to a significant yield based on 2020 distributions.
Current yield: 2.6%
Plains All American Pipeline (PAA)
Plains All American is, as the name implies, a pipeline company that is focused on the transportation and storage of fossil fuels including crude oil and natural gas liquids in the U.S. and Canada. It also operates supply and logistics infrastructure including trucks and barges to help customers get their oil and gas to the pipeline network itself. While energy prices were notoriously volatile in 2020, dividend investors should take comfort in the fact that PAA is not selling energy based on these market prices but is rather just a “toll taker” moving commodities around the economy. This makes its operations more stable than more prominent integrated energy stocks, and its 18-cent quarterly dividend should be reliable in 2021.
Current yield: 9.8%
United Microelectronics Corp. (UMC)
Though it only pays a dividend once a year in July, UMC is worth a look thanks to its massive scale and impressive momentum lately. Like other less prominent semiconductor foundries, UMC doesn’t have much in the way of profits as it doesn’t develop internally designed chips but is instead reliant on third-party business. However, with a $21 billion market cap it has plenty of customers — particularly after news in 2020 that leading chipmaker Intel Corp. (INTC) may get out of the foundry game altogether. Based on last July’s payday, UMC’s yield is the lowest on this list. That’s in part because shares have exploded more than 200% in the last year — hinting 2021’s payout could be much bigger.
Current yield: 1.6%
WisdomTree Investments (WETF)
Many investors may be familiar with WisdomTree from its lineup of exchange-traded funds. However, the investment manager itself is a publicly traded company — and right now, it has the wind at its back thanks to a big rally for stocks since March and strong investor interest in its products. WETF jumped 60% to finish the last six months of 2020, but share prices are only around $6 right now. More importantly, the quarterly dividend of 3 cents adds up to a yield better than the typical S&P 500 stock. With regular fees from its investment services, WETF has the stable cash flow to support its dividend in 2021.
Current yield: 2.1%
Nine of the best dividend stocks to buy under $10:
— Aegon N.V. (AEG)
— Annaly Capital Management (NLY)
— ASE Technology (ASX)
— Enerplus Corporation (ERF)
— Grupo Aval Acciones y Valores S.A. (AVAL)
— Pearson (PSO)
— Plains All American Pipeline (PAA)
— United Microelectronics Corp. (UMC)
— WisdomTree Investments (WETF)
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Update 01/07/21: This story was published at an earlier date and has been updated with new information.