Dividend stocks can be a reliable source of yield in a volatile market.
A quarterly dividend payment from a high-quality stock may be as close to a sure thing as an investor can find on Wall Street. Rising interest rates and elevated inflation dragged down the stock prices of many dividend stocks in 2022, but the lower a stock’s price falls the higher its dividend yield becomes. Unfortunately, companies often cut their dividend payments as the first line of defense when times get tough, and a large number of dividend stocks priced under $10 may not be safe investments. So, with that warning in mind, here are six of the best dividend stocks to buy under $10. All dividends are calculated on a trailing-12-month basis.
Hanesbrands Inc. (ticker: HBI)
Hanesbrands is one of the world’s largest producers of intimate apparel and other leisure wear. Hanesbrands shares fell nearly 62% in 2022, making it the worst performer on this list. However, there’s a silver lining to underperformance for dividend stocks. Hanesbrands’ falling stock price has pushed its dividend yield up to 9.4% at the start of 2023. The company typically pays a quarterly dividend, which has averaged $0.60 per share over the past five years.
Dividend yield: 9.4%
Orange SA (ORAN)
Orange SA is a diversified French telecommunication company. Orange shares were down about 7.5% in 2022, making it the best performer of the year on this list. With a price-earnings ratio of only 6.48, meaning investors are paying only $6.48 per dollar of company earnings, you’re getting a fair deal for the stock. ORAN typically pays two dividends each year in June and December, although the actual payments vary year to year.
Dividend yield: 7.5%
United Microelectronics Corp. (UMC)
United Microelectronics Corp is a Taiwanese semiconductor company founded in 1980 with a current market capitalization of about $16.3 billion. Although it’s headquartered in Taiwan, UMC has offices around the world, including in the U.S. and Europe. Sales revenue increased by more than 33% in 2022. It’s also been growing its dividend at an impressive rate since 2019, with a current yield of 7.6%. That said, UMC only pays one dividend per year during the summer months, so it’s more of an annual bonus than a regular income producer.
Dividend yield: 7.6%
Telefonica SA (TEF)
Telefonica is the largest Spanish telecommunication company. The company has grown revenue 4.1% through the first nine months of 2022, including 3.8% growth in the third quarter. Telefonica stock fell more than 17% in 2022, which pushed up its dividend even though payments also fell from $0.40 in 2021 to $0.31 in 2022. Dividends from the company averaged $0.44 over the past five years and typically come in June and December.
Dividend yield: 8.5%
Lumen Technologies Inc. (LUMN)
Lumen is an international technology and communications company headquartered in the U.S., and it provides integrated cloud and network products and services to businesses around the world. The stock took a beating in 2022, with a share price that fell nearly 60% during the year. This helped bolster its dividend yield, however, which is currently more than 13%. LUMN is “more attractively priced in relation to its true value than all but a few of the stocks in the industry,” according to ISS-EVA analysts.
Dividend yield: 13.7%
Rithm Capital Corp. (RITM)
Rithm Capital provides capital and services to the real estate and financial sectors. The company has paid more than $4.2 billion in dividends since inception in 2013. The current dividend yield is among the highest on this list at 11.9%, with a share price that fell by more than 25% in 2022. Unlike some of the other dividend stocks on this list, RITM strives for a quarterly dividend.
Dividend yield: 11.9%
6 of the best cheap dividend stocks under $10:
— Hanesbrands Inc. (HBI)
— Orange SA (ORAN)
— United Microelectronics Corp. (UMC)
— Telefonica SA (TEF)
— Lumen Technologies Inc. (LUMN)
— Rithm Capital Corp. (RITM)
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Update 01/06/23: This story was previously published at an earlier date and has been updated with new information.