The U.S. economy is likely headed for a slowdown in 2024, and inflation remains elevated above the Federal Reserve’s 2% target rate. One way for investors to offset the negative impact of inflation is to generate regular income via dividend stocks. Historically, dividends have accounted for about 40% of the total stock market return since 1930, but they have generated more than half of the market’s total return during decades in which inflation was high, according to Fidelity.
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Fortunately, there are plenty of dividend stocks out there that don’t cost an arm and a leg. Here are 10 of the best dividend stocks to buy for less than $20, according to CFRA Research:
| Stock | Implied upside over Jan. 19 close | Yield |
| Vale SA (ticker: VALE) | 30.4% | 9.2% |
| Energy Transfer LP (ET) | 8.8% | 9.1% |
| Orange SA (ORAN) | 6.4% | 6.1% |
| Cenovus Energy Inc. (CVE) | 47.5% | 2.8% |
| Telefónica SA (TEF) | 9% | 7.8% |
| Nokia Corp. (NOK) | 60.3% | 3.7% |
| Regions Financial Corp. (RF) | 28.9% | 5.2% |
| Aegon Ltd. (AEG) | 10% | 4.7% |
| New York Community Bancorp Inc. (NYCB) | 20.4% | 6.8% |
| V.F. Corp. (VFC) | 40% | 2.3% |
Vale SA (VALE)
Vale is a Brazilian miner and is one of the world’s largest iron ore and nickel producers. Analyst Matthew Miller says Vale faces ongoing liability risks associated with the 2019 Brumadinho dam disaster in Brazil, but the company has taken proactive steps to reduce the risk of future incidents. In fact, Miller says Vale’s management has made safety its top priority. He says Vale has an attractive cash flow profile, and its strong balance sheet will allow Vale to return much of that cash to shareholders. CFRA has a “buy” rating and $18 price target for VALE stock, which closed at $13.80 on Jan. 19.
Energy Transfer LP (ET)
Energy Transfer is a midstream U.S. oil and gas infrastructure provider. The company also has an alternative energy group focused on developing renewable energy technology for the future. Analyst Stewart Glickman says Energy Transfer’s attractive properties in the U.S. Gulf Coast, particularly its assets in Mont Belvieu, Texas, allow the company to capitalize on overseas natural gas liquids demand. Glickman says liquefied natural gas demand should remain high through at least 2030. CFRA has a “buy” rating and $15 price target for ET stock, which closed at $13.79 on Jan. 19.
Orange SA (ORAN)
Orange is a diversified French telecommunications company. Orange shares are up 25.5% in the past year including dividends, the best performance of any dividend stock on this list. Analyst Adrian Ng says the European telecommunications market is challenging given regulatory and operating hurdles, but Orange’s stock has already priced in those difficulties at its current valuation. Ng says Orange’s cost-cutting measures will support its margins, its management is committed to the stock’s dividend and Orange could unlock more than 10 billion euros ($10.9 billion) in value by monetizing tower assets. CFRA has a “buy” rating and $13 price target for ORAN stock, which closed at $12.22 on Jan. 19.
Cenovus Energy Inc. (CVE)
Cenovus Energy is a Canadian integrated oil company focused on exploration and production in Canada and crude oil refining in the U.S. Analyst Jonnathan Handshoe says Cenovus’ Western Canada crude oil business struggled in 2023, but the company is positioned to benefit from strong energy demand in 2024, especially if China’s economic recovery gains momentum. Handshoe says Cenovus doesn’t have a significant amount of debt maturing until 2027, and he believes the company can reduce its debt to less than $3 billion by mid-2024. CFRA has a “buy” rating and $22 price target for CVE stock, which closed at $14.92 on Jan. 19.
[READ: 7 Best Cheap Dividend Stocks to Buy Under $10]
Telefónica SA (TEF)
Spain’s Telefónica is another attractive international telecom dividend stock trading under $20. Ng says the company has made several major improvements to its balance sheet and corporate structure, including buying E-Plus in Germany and GVT in Brazil, exiting the Central America market, and combining its U.K. telecom assets in a joint venture deal with Liberty Global PLC (LBTYA, LBTYB). He says Telefónica now has a strong position in its core markets and is positioned to generate stable revenue while investors collect its sizable dividend. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.13 on Jan. 19.
Nokia Corp. (NOK)
Nokia is a telecom equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Keith Snyder says the 5G network upgrade cycle is gaining momentum in the U.S. and China and will ultimately be larger and longer lasting than previous cycles. Snyder says Nokia has executed well in a difficult inflationary environment and is positioned to generate industry-leading revenue growth. He is bullish on the company’s improved earnings visibility and projects a return to positive revenue growth in 2024. CFRA has a “buy” rating and $5.50 price target for NOK stock, which closed at $3.43 on Jan. 19.
Regions Financial Corp. (RF)
Regions Financial is a U.S. regional bank providing consumer and commercial banking, real estate and mortgage products, and wealth management services in 16 U.S. states in the Midwest and South. Regions took a big hit during the U.S. regional banking crisis in early 2023, but the industry has now seemingly stabilized. Analyst Alexander Yokum says Regions has a diversified business model, has limited exposure to office loans and commercial real estate, and has a long track record of industry-leading earnings and revenue growth. CFRA has a “buy” rating and $24 price target for RF stock, which closed at $18.62 on Jan. 19.
Aegon Ltd. (AEG)
Aegon is a Dutch insurance company that offers insurance, savings, pension, and investment products and services around the world. Analyst Jeff Lye is bullish on the company’s plan to focus on strategic assets that reduce capital-ratio volatility and generate an attractive return on capital. Lye says the company’s commitment to capital returns will continue to support the stock. He projects a cash yield to shareholders over the next 12 months in the double-digit percentage range and anticipates 5% revenue growth for Aegon in 2024. CFRA has a “buy” rating and $6.50 price target for AEG stock, which closed at $5.91 on Jan. 19.
New York Community Bancorp Inc. (NYCB)
New York Community Bancorp is a U.S. regional bank that focuses primarily on rent-regulated, non-luxury, multifamily lending in the Northeast and Midwest regions. During the regional banking crisis in early 2023, New York Community Bancorp stepped in to acquire $2.7 billion in assets from failed Signature Bank, including 40 bank branches. Yokum says New York Community’s net interest margin has been permanently boosted following its Signature acquisition. In fact, its net interest margin is now 60% above pre-pandemic levels, while average peer NIM is down 8%. CFRA has a “buy” rating and $12 price target for NYCB stock, which closed at $9.97 on Jan. 19.
V.F. Corp. (VFC)
V.F. is an apparel wholesaler and owner of popular brands including The North Face, Vans and Timberland. Together, those three brands account for about 80% of V.F.’s total sales. V.F. shares are down 42% in the past year. But even after cutting its dividend by about 82% since December 2022, VF still pays a respectable 2.3% yield. Analyst Zachary Warring says North Face has been a silver lining for the struggling company, including 11% brand sales growth in fiscal 2023. CFRA has a “buy” rating and $22 price target for VFC stock, which closed at $15.71 on Jan. 19.
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10 Best Cheap Dividend Stocks to Buy Under $20 originally appeared on usnews.com
Update 01/22/24: This story was previously published at an earlier date and has been updated with new information.
