The U.S. economy is likely headed for a slowdown in 2024, and inflation remains elevated. 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 accounted for more than half of the market’s total return during decades in which inflation was high. Fortunately, there are plenty of dividend stocks out there that don’t cost an arm and a leg.
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Here are 10 of the best dividend stocks under $20, according to CFRA:
| Stock | Implied Upside Over March 20 Close | Forward Dividend Yield |
| Vale SA (ticker: VALE) | 37.3% | 14.2% |
| Energy Transfer LP (ET) | 2.2% | 8.1% |
| Cenovus Energy Inc. (CVE) | 4% | 2.2% |
| Orange SA (ORAN) | 12% | 6.5% |
| Telefonica SA (TEF) | 5.1% | 7.6% |
| Nokia Corp. (NOK) | 53.2% | 3.6% |
| Regions Financial Corp. (RF) | 11.3% | 4.9% |
| Healthpeak Properties Inc. (DOC) | 19.5% | 6.8% |
| Aegon Ltd. (AEG) | 10.9% | 5.5% |
| Patterson-UTI Energy Inc. (PTEN) | 19.4% | 2.7% |
Vale SA (VALE)
Vale is a Brazilian miner and is one of the world’s largest iron ore and nickel producers. Vale shares are down 18.4% this year through March 20, the worst performance of any stock on this list. Fortunately, the stock’s poor performance has driven its dividend yield up to an impressive 14.2%, the highest on this list. Analyst Matthew Miller says Vale faces ongoing liability risks associated with the 2019 Brumadinho dam disaster in Brazil, but the company’s cash flow profile remains impressive and Vale is seriously prioritizing safety. CFRA has a “buy” rating and $17 price target for VALE stock, which closed at $12.38 on March 20.
Energy Transfer LP (ET)
Energy Transfer is a midstream U.S. oil and gas infrastructure company that transports and stores hydrocarbons. The company also has an alternative energy group focused on developing renewable energy technology for the future. Analyst Stewart Glickman says Energy Transfer’s distributable cash flow per share is above its anticipated dividend payouts. The Biden administration’s hold on new liquefied natural gas, or LNG, exports creates uncertainty, but Glickman is bullish on the company’s Permian Basin exposure, sizable backlog and high-quality assets in the U.S. Gulf Coast region, particularly in Mont Belvieu, Texas. CFRA has a “buy” rating and $16 price target for ET stock, which closed at $15.66 on March 20.
Cenovus Energy Inc. (CVE)
Cenovus Energy is a Canadian integrated oil company focused on exploration and production of bitumen in Canada and crude oil refining in the U.S. Analyst Jonnathan Handshoe says a drop in U.S. crude oil prices weighed on Cenovus in 2023, but the company is well positioned in 2024 thanks to its significant exposure to Western Canada crude oil. Handshoe says the company’s Foster Creek and Christina Lake assets have the lowest breakeven costs among all oil sands producers, reducing risks associated with a drop in crude prices. CFRA has a “buy” rating and $20 price target for CVE stock, which closed at $19.23 on March 20.
Orange SA (ORAN)
Orange is a diversified French telecom company. Analyst Adrian Ng says Orange is dealing with a challenging regulatory and operating environment in Europe, but those challenges have been fully priced into the stock. Meanwhile, Ng says Orange shares are attractively valued and the company’s cost cutting measures will support its margins while monetization of its tower assets could raise cash for other investments. He says Orange is committed to its dividend and its move to merge Spanish operations with MasMovil will help rationalize the difficult market. CFRA has a “buy” rating and $13 price target for ORAN stock, which closed at $11.60 on March 20.
Telefonica SA (TEF)
Spain’s Telefonica is another attractive international telecom dividend stock trading under $20. Ng says Telefonica has made several key improvements to its portfolio and balance sheet in recent years. The company acquired E-Plus in Germany and GVT in Brazil. It also combined its U.K. telecom assets in a joint venture deal with Liberty Global PLC (LBTYA, LBTYB) and exited the Central America market. Ng says Telefonica exceeded expectations in 2023 thanks in part to 4.7% revenue growth in Germany and momentum in its mobile business. CFRA has a “buy” rating and $4.50 price target for TEF stock, which closed at $4.28 on March 20.
[15 Best Dividend Stocks to Buy for 2024]
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 initial stage of the global 5G investment cycle is gaining momentum, led by spending in the U.S. and China. Snyder predicts the current 5G cycle will be larger and longer lasting than previous cycles. Snyder projects Nokia will return to positive revenue and earnings growth in 2024 despite Nokia’s guidance for at least a 10% drop in mobile networks revenue. CFRA has a “buy” rating and $5.50 price target for NOK stock, which closed at $3.59 on March 20.
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 somewhat stabilized. Analyst Alexander Yokum says Regions has a strong capital position and a focus on the attractive U.S. Southeast region. Yokum says a rebound in capital market income should help Regions outperform in 2024. CFRA has a “buy” rating and $22 price target for RF stock, which closed at $19.77 on March 20.
Healthpeak Properties Inc. (DOC)
Healthpeak Properties is a health care real estate investment trust, or REIT, that invests in life science and medical office properties and other health care facilities throughout the U.S. Healthpeak recently completed a merger with Physicians Realty Trust, and the combined company began trading under the ticker DOC on March 4. Analyst Michael Elliott says he is bullish on the combined company, which has significant exposure to the medical office sector. He says interest in drug innovation will likely remain elevated for the foreseeable future. CFRA has a “buy” rating and $21 price target for DOC stock, which closed at $17.58 on March 20.
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 says Aegon’s management has an impressive track record, and he endorses the company’s focus on strategic assets that reduce its capital ratio volatility and generate an attractive return on capital. Lye says the company’s aggressive capital return program will help support its stock, and he projects Aegon will reward investors with a cash yield to shareholders in the double-digit percentage range over the next year. CFRA has a “buy” rating and $6.50 price target for AEG stock, which closed at $5.86 on March 20.
Patterson-UTI Energy Inc. (PTEN)
Patterson-UTI Energy is a U.S. oil and gas drilling company that provides U.S. land drilling services. The stock is up 9.3% so far this year, the best performance on this list. Handshoe says Patterson-UTI’s drilling segment may experience headwinds in 2024, but the company’s completion services business should help protect its overall margins. In addition, Handshoe says Patterson’s NexTier assets should continue to be a significant source of free cash flow. In fact, he projects Patterson-UTI will generate $800 million in free cash flow in 2024. CFRA has a “buy” rating and $14 price target for PTEN stock, which closed at $11.73 on March 20.
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10 Best Cheap Dividend Stocks to Buy Under $20 originally appeared on usnews.com
Update 03/21/24: This story was previously published at an earlier date and has been updated with new information.
