Generally speaking, investing is about striking the balance between risk and reward. And when it comes to high-dividend stocks, the trade-off ostensibly tends to be higher payouts but also an elevated risk that those dividends may not be as generous in the future.
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This is further compounded when investors look for “cheap” stocks under $10. After all, most companies strive for the highest possible share price — so a persistently low value is often a sign of trouble.
All this being said, it’s undeniable that many investors are very attracted to investments that are either high in yield, low in share price, or both. And the following stocks definitely fit that description, with current prices comfortably under $10 per share and yields north of 5%. They are also all reasonably well established, with market values of more than $1 billion.
Here are seven of the best high-dividend stocks to buy for less than $10:
| Stock | Dividend yield |
| Algonquin Power & Utilities Corp. (ticker: AQN) | 6.9% |
| B2Gold Corp. (BTG) | 5.3% |
| Claros Mortgage Trust Inc. (CMTG) | 11.4% |
| LXP Industrial Trust (LXP) | 5.3% |
| Medical Properties Trust Inc. (MPW) | 13.3% |
| Prospect Capital Corp. (PSEC) | 13.0% |
| Valley National Bancorp (VLY) | 6.0% |
Algonquin Power & Utilities Corp. (AQN)
— Market capitalization: $4.3 billion
— Dividend yield: 6.9%
Algonquin is a renewable energy utility headquartered in Ontario but distributing power in seven continental U.S. states and in Bermuda. It also has a water and wastewater arm that operates in several more states and in the South American nation of Chile. If that weren’t enough, it also offers natural gas distribution in Canada and the U.S. This is clearly not your typical regional utility, with quite a sprawling and diversified operation for a mid-cap stock. The good news is that some characteristics that investors expect from a utility stock, such as big dividends and consistent customers and revenue, exist at AQN.
That’s not to say AQN is a riskless proposition: This seems to be a company concerned with investing in growth and competing with some very entrenched energy distribution players in various markets. The current dividend is a nice incentive to buy and see how it goes, but it’s worth noting that the quarterly dividend was cut in 2023 from just over 18 cents to roughly 11 cents a share.
B2Gold Corp. (BTG)
— Market cap: $4 billion
— Dividend yield: 5.3%
Canada-based B2Gold Corp. is a gold producer that operates or has interests in mines that range from Finland and the Philippines to Africa and Colombia. Obviously a gold miner is very dependent on commodity pricing, and can be volatile as a result. That’s even more true for smaller miners like BTG. Interestingly enough, even though gold prices have been rising, there have been headwinds for this stock, and its revenue is actually forecast to decline this year. But B2Gold is looking to amp up production in 2025, with a projected revenue bump of 29% for the next fiscal year — presuming gold prices stay firm, that is. In the meantime, the company is comfortably profitable with earnings per share that will more than cover its 16-cent annual dividend.
Claros Mortgage Trust Inc. (CMTG)
— Market cap: $1.2 billion
— Dividend yield: 11.4%
Real estate finance company Claros Mortgage Trust is structured as a real estate investment trust, or REIT, even though it doesn’t technically own physical properties. Instead, its business is originating loans on “transitional” commercial real estate assets in the United States. In other words, these are volatile markets that are changing in composition — sometimes because of gentrification or growth prospects, and other times because the areas have fallen on hard times or are are trying to turn things around.
This is always an uncertain business to be in, and in a changing interest-rate environment there’s even more on the line for CMTG. In 2023, the company’s distributions ticked down to 25 cents a quarter versus 37 cents previously, but they’ve been coming consistently since then. Shares are up more than 20% from their 52-week lows this year on hopes that lower interest rates will help CMTG finance a better portfolio of loans, but this cheap dividend stock obviously comes with some risk factors.
LXP Industrial Trust (LXP)
— Market cap: $2.9 billion
— Dividend yield: 5.3%
A different flavor of real estate investment trust, LXP is an industrial specialist that owns nearly 55 million square feet of single-tenant properties such as warehouses, with e-commerce leader Amazon.com Inc. (AMZN) as its top customer. Unlike some of the other troubled stocks on this list, LXP actually has a pretty good track record of dividend increases to crow about. Specifically, it currently pays a quarterly dividend of 13 cents per share — up from 12.5 cents last year and 10.25 cents five years ago. That said, the high-interest-rate environment has created the same headwind for this real estate firm that needs ready cash to expand. And considering its modest size — leader Prologis Inc. (PLD) is roughly 40 times the market value — there’s good reason the stock has lagged its peers and the market lately.
[SEE: 7 Dividend Stocks to Buy and Hold Forever]
Medical Properties Trust Inc. (MPW)
— Market cap: $2.7 billion
— Dividend yield: 13.3%
Medical Properties is yet another REIT, but one that’s focused on health care real estate. Like many firms in this sector, rising rates have put a lot of pressure on MPW because higher rates make it more expensive to finance growth via acquisition or new construction. Complicating things is that major tenant Steward Health Care recently declared bankruptcy and left a stack of unpaid property bills as a result. On the plus side, last year MPW proactively reduced its distribution to 15 cents per share from 29 cents previously to protect its finances — so in many ways, the bad news has been incorporated. That said, shares are down more than 70% from their 2022 high, so there’s no guarantee that things can’t get even worse from here, either for the stock value or the dividend.
Prospect Capital Corp. (PSEC)
— Market cap: $2.3 billion
— Dividend yield: 13%
Prospect Capital is a familiar name for many dividend investors, as one of the leading business development companies, or BDCs, with a regular stream of monthly dividends instead of quarterly payouts. The term BDC is a fancy way to say that PSEC derives its profits based on the success of its investment portfolio, which is focused on later-stage opportunities such as leveraged buyouts and restructurings. Prospect Capital has more than 35 years of experience and a diversified portfolio that is currently made up of more than 120 businesses in 36 different industries. It’s also worth noting the company has paid dividends of 6 cents every month since 2017, navigating the pandemic and a changing interest rate environment.
Valley National Bancorp (VLY)
— Market cap: $3.8 billion
— Dividend yield: 6%
In 2023, the regional banking sector fell apart as First Republic and Silicon Valley Bank both went under. But while SVB went down as the second-largest bank failure in history behind 2008’s collapse of Washington Mutual, the dark predictions of contagion didn’t fully pan out. As of this writing, Valley National is still paying the same 11-cent quarterly dividend that it has paid uninterrupted since 2013. However, it’s worth noting that peer New York Community Bancorp Inc. (NYCB) had also been circling the drain and recently took the drastic step to slash its quarterly payout down to a penny from 17 cents at the end of last year. There’s a ton of risk here, but if VLY comes out on the other side of this intact, then those who buy this cheap stock now will be rewarded with a tremendous yield.
[SEE: 9 Best Cheap Stocks to Buy Under $5.]
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7 Best High-Dividend Stocks to Buy Under $10 originally appeared on usnews.com
