One way for investors to offset the negative impact of inflation is to generate regular income via dividend stocks. In the past 90 years, dividends have accounted for about 40% of the total stock market return. The combination of a rising stock price and a regular dividend can work wonders for long-term returns. Dividends from high-quality stocks can also be a reliable source of income during economic downturns.
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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 under $20, according to CFRA:
| Stock | Upside potential* | Forward dividend yield |
| Energy Transfer LP (ticker: ET) | 11.3% | 7.9% |
| Vale SA (VALE) | 14.2% | 16.9% |
| Orange SA (ORAN) | 7.7% | 6.4% |
| Cenovus Energy Inc. (CVE) | 41.9% | 2.8% |
| Telefonica SA (TEF) | 5.9% | 6.9% |
| Nokia Corp. (NOK) | 7.1% | 3.3% |
| Host Hotels & Resorts Inc. (HST) | 9.1% | 4.6% |
| AES Corp. (AES) | 7.8% | 3.7% |
| Aegon Ltd. (AEG) | 25.4% | 5.9% |
| First Horizon Corp. (FHN) | 26.5% | 3.8% |
*As of Sept. 13 close.
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. In addition to its attractive dividend yield, Energy Transfer shares are up an impressive 24.6% this year on a total return basis. Analyst Stewart Glickman says Energy Transfer is positioned to generate distributable cash per share exceeding its anticipated cash distributions, suggesting its dividend is safe. In addition, Glickman says the company’s Gulf Coast exposure allows Energy Transfer to profit from overseas natural gas liquids demand. CFRA has a “buy” rating and $18 price target for ET stock, which closed at $16.17 on Sept. 13.
Vale SA (VALE)
Vale is a Brazilian miner and is one of the world’s largest iron ore and nickel producers. Vale shares have underperformed in 2024 and are down 28.2% so far this year. The silver lining for investors is that the pullback has pushed Vale’s dividend yield way up to 16.9%. Analyst Matthew Miller says Vale will face ongoing liability risk related to the Brumadinho dam disaster in Brazil, but he says the company has taken major steps to reduce the risk of future disasters. CFRA has a “buy” rating and $12 price target for VALE stock, which closed at $10.51 on Sept. 13.
Orange SA (ORAN)
Orange is a diversified French telecommunications company. Analyst Adrian Ng says Orange will continue to deal with a difficult operating environment in Europe, but he says those regulatory risks are already priced into the stock at current levels. Ng says Orange’s cost-cutting measures will support its profit margins, and the potential monetization of its tower assets could provide significant cash for future investments. He says the Africa and Middle East regions have been Orange’s main revenue growth contributors as of late. CFRA has a “strong buy” rating and $13 price target for ORAN stock, which closed at $12.07 on Sept. 13.
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. Glickman says Cenovus’ oil sands properties, including Foster Creek and Christina Lake, have the lowest break-even costs of any Canadian oil sands producers. These low costs can allow the company to continue to produce profitably even if energy prices fall. In addition, Glickman says the company’s oil refining facilities in the U.S. and Canada provide Cenovus with hedging opportunities. CFRA has a “buy” rating and $23 price target for CVE stock, which closed at $16.20 on Sept. 13.
Telefonica SA (TEF)
Spain’s Telefonica is another attractive international telecom dividend stock trading under $20. Ng says Telefonica has made several significant restructuring moves in recent years that have helped reinforce its core business and improve its balance sheet. The company left Central America and acquired E-Plus in Germany and GVT in Brazil. It has also combined its U.K. telecom assets in a joint venture deal with Liberty Global PLC (LBTYA, LBTYB) that included a $3.2 billion cash payment for Telefonica. Ng predicts Telefonica’s positive momentum will continue. CFRA has a “buy” rating and $5 price target for TEF stock, which closed at $4.72 on Sept. 13.
[READ: 15 Best Dividend Stocks to Buy Now]
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 5G network upgrade cycle in the U.S. and China has gained momentum, and the current cycle will likely be larger and longer-lasting than previous cycles, supporting Nokia’s demand for years to come. Looking ahead, Nokia expects to outgrow industry peers and regain lost market share. Snyder says Nokia’s management team has executed well despite inflation and supply chain challenges. CFRA has a “buy” rating and $4.50 price target for NOK stock, which closed at $4.20 on Sept. 13.
Host Hotels & Resorts Inc. (HST)
Host Hotels & Resorts is a hotel and resort real estate investment trust, or REIT, that owns luxury hotels in North and South America. Analyst Siye Desta says lodging demand will likely remain resilient. Business and group demand continues to improve, and local travel demand strength has mitigated international travel weakness. Desta says Host’s portfolio of luxury properties positions the company to withstand an economic downturn better than many peers. In addition, Desta says Host has the only investment-grade balance sheet among lodging REITs, reducing risk for investors. CFRA has a “buy” rating and $19 price target for HST stock, which closed at $17.42 on Sept. 13.
AES Corp. (AES)
AES is one of the world’s largest independent power generators and distributors, and the company also develops renewable energy infrastructure. Analyst Daniel Rich says AES has a sizable 12.6 gigawatt backlog, including large deals with tech giants Alphabet Inc. (GOOG, GOOGL), Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT). The company has been aggressively selling assets since 2023 and expects to continue to divest non-regulated power assets and generate 8% annual earnings per share growth through 2027. Rich projects at least 4% revenue growth in 2025 as the company works through its renewable project backlog. CFRA has a “buy” rating and $20 price target for AES stock, which closed at $18.54 on Sept. 13.
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 has a strong track record of execution, and the company’s 2024 targets for free cash flow and operating capital generation are within reach. Lye is bullish on Aegon’s strategy of focusing on strategic assets that generate an attractive return on capital and reduce capital ratio volatility. Finally, Lye says Aegon’s new buyback program is a testament to its strong financial position. CFRA has a “buy” rating and $7.50 price target for AEG stock, which closed at $5.98 on Sept. 13.
First Horizon Corp. (FHN)
First Horizon is a U.S. regional bank, providing retail and commercial banking, asset management services and other banking services in Tennessee, Florida and the Carolinas. U.S. regional bank stocks have experienced periodic volatility since early 2023 as declining bond values shook investor confidence and led to concerns about liquidity and withdrawals. First Horizon shares were hit hard in 2023, but analyst Alexander Yokum says the bank’s net interest margin has improved significantly from 2023 lows and it is well capitalized and positioned for share buybacks. CFRA has a “buy” rating and $20 price target for FHN stock, which closed at $15.81 on Sept. 13.
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10 Best Cheap Dividend Stocks to Buy Under $20 originally appeared on usnews.com
Update 09/16/24: This story was previously published at an earlier date and has been updated with new information.
