S&P 500   4,269.80 (-0.10%)
DOW   33,859.97 (-0.35%)
QQQ   328.60 (+0.03%)
AAPL   173.78 (-0.44%)
MSFT   290.45 (-0.30%)
META   174.40 (-0.26%)
GOOGL   119.90 (+0.29%)
AMZN   142.04 (-0.04%)
TSLA   910.31 (-0.18%)
NVDA   186.65 (+1.80%)
NIO   19.82 (-1.29%)
BABA   90.38 (+0.68%)
AMD   100.27 (+2.04%)
MU   62.62 (+1.62%)
T   18.40 (-0.11%)
CGC   3.78 (-6.90%)
F   15.98 (-0.31%)
GE   79.03 (-1.11%)
DIS   122.16 (-0.53%)
AMC   20.12 (-5.81%)
PYPL   98.48 (-0.95%)
PFE   48.53 (-1.50%)
NFLX   244.88 (+1.55%)
S&P 500   4,269.80 (-0.10%)
DOW   33,859.97 (-0.35%)
QQQ   328.60 (+0.03%)
AAPL   173.78 (-0.44%)
MSFT   290.45 (-0.30%)
META   174.40 (-0.26%)
GOOGL   119.90 (+0.29%)
AMZN   142.04 (-0.04%)
TSLA   910.31 (-0.18%)
NVDA   186.65 (+1.80%)
NIO   19.82 (-1.29%)
BABA   90.38 (+0.68%)
AMD   100.27 (+2.04%)
MU   62.62 (+1.62%)
T   18.40 (-0.11%)
CGC   3.78 (-6.90%)
F   15.98 (-0.31%)
GE   79.03 (-1.11%)
DIS   122.16 (-0.53%)
AMC   20.12 (-5.81%)
PYPL   98.48 (-0.95%)
PFE   48.53 (-1.50%)
NFLX   244.88 (+1.55%)
S&P 500   4,269.80 (-0.10%)
DOW   33,859.97 (-0.35%)
QQQ   328.60 (+0.03%)
AAPL   173.78 (-0.44%)
MSFT   290.45 (-0.30%)
META   174.40 (-0.26%)
GOOGL   119.90 (+0.29%)
AMZN   142.04 (-0.04%)
TSLA   910.31 (-0.18%)
NVDA   186.65 (+1.80%)
NIO   19.82 (-1.29%)
BABA   90.38 (+0.68%)
AMD   100.27 (+2.04%)
MU   62.62 (+1.62%)
T   18.40 (-0.11%)
CGC   3.78 (-6.90%)
F   15.98 (-0.31%)
GE   79.03 (-1.11%)
DIS   122.16 (-0.53%)
AMC   20.12 (-5.81%)
PYPL   98.48 (-0.95%)
PFE   48.53 (-1.50%)
NFLX   244.88 (+1.55%)
S&P 500   4,269.80 (-0.10%)
DOW   33,859.97 (-0.35%)
QQQ   328.60 (+0.03%)
AAPL   173.78 (-0.44%)
MSFT   290.45 (-0.30%)
META   174.40 (-0.26%)
GOOGL   119.90 (+0.29%)
AMZN   142.04 (-0.04%)
TSLA   910.31 (-0.18%)
NVDA   186.65 (+1.80%)
NIO   19.82 (-1.29%)
BABA   90.38 (+0.68%)
AMD   100.27 (+2.04%)
MU   62.62 (+1.62%)
T   18.40 (-0.11%)
CGC   3.78 (-6.90%)
F   15.98 (-0.31%)
GE   79.03 (-1.11%)
DIS   122.16 (-0.53%)
AMC   20.12 (-5.81%)
PYPL   98.48 (-0.95%)
PFE   48.53 (-1.50%)
NFLX   244.88 (+1.55%)

Cheap Dividend Stocks

Looking for yield in today's market? These cheap dividend stocks are trading within 20% of their 52-week lows and all pay a dividend yield of 3% or greater. Learn how to invest in cheap dividend stocks.

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
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Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
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Analyst consensus is the average investment recommendation among Wall Street research analysts.
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Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PriceTypeDividend YieldAnnual PayoutPayout Ratio3-Year Dividend GrowthEx-Dividend DateIndicator(s)
Altus Midstream stock logo
ALTM
Altus Midstream
$38.61
0.0%
Stock15.54%$6.00178.04%N/AN/AHigh Trading Volume
ViacomCBS Inc. stock logo
VIACA
ViacomCBS
$29.52
-3.2%
Stock3.25%$0.9654.86%N/AN/A
Koninklijke Philips stock logo
PHG
Koninklijke Philips
$18.76
-3.7%
Stock4.16%$0.7847.56%N/AN/A
GSK plc stock logo
GSK
GSK
$33.96
-2.1%
Stock4.92%$1.6751.23%N/A8/18/2022
SK Telecom Co.,Ltd stock logo
SKM
SK Telecom Co.,Ltd
$21.26
-1.4%
Stock5.46%$1.1654.72%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Sanofi stock logo
SNY
Sanofi
$41.04
-2.7%
Stock3.07%$1.2629.65%N/AN/A
Fresenius Medical Care AG & Co. KGaA stock logo
FMS
Fresenius Medical Care AG & Co. KGaA
$18.07
-1.7%
Stock2.71%$0.4928.00%N/AN/AShort Interest ↓
Pan American Silver Corp. stock logo
PAAS
Pan American Silver
$16.64
-0.9%
Stock2.88%$0.4844.04%34.42%8/19/2022Analyst Report
Analyst Revision
News Coverage
Maverix Metals Inc. stock logo
MMX
Maverix Metals
$3.69
-0.5%
Stock1.36%$0.0533.33%N/A8/30/2022Dividend Announcement
Analyst Report
Analyst Revision
News Coverage
Franklin Street Properties Corp. stock logo
FSP
Franklin Street Properties
$3.20
-0.6%
Stock1.25%$0.04N/A13.92%N/APositive News
CGAU
Centerra Gold
$4.67
-1.1%
Stock4.71%$0.22N/AN/A8/24/2022Analyst Report
Analyst Revision
Seanergy Maritime Holdings Corp. stock logo
SHIP
Seanergy Maritime
$0.69
-3.8%
Stock14.60%$0.1090.91%N/A9/22/2022Positive News
Lufax Holding Ltd stock logo
LU
Lufax
$3.92
-0.8%
Stock8.16%$0.32N/AN/A10/12/2022
Grupo Televisa, S.A.B. stock logo
TV
Grupo Televisa, S.A.B.
$7.06
-0.4%
Stock1.13%$0.0815.69%N/AN/AAnalyst Report
Azenta, Inc. stock logo
AZTA
Azenta
$58.32
-1.4%
Stock0.34%$0.20N/AN/AN/AAnalyst Report
Analyst Revision
Generation Income Properties, Inc. stock logo
GIPR
Generation Income Properties
$5.75
-3.0%
Stock11.30%$0.65N/AN/A9/14/2022Earnings Report
Iron Spark I Inc. stock logo
ISAA
Iron Spark I
$9.89
+0.1%
Stock2.02%$0.20N/AN/AN/ANews Coverage
Positive News
Industrial Logistics Properties Trust stock logo
ILPT
Industrial Logistics Properties Trust
$9.08
Stock0.44%$0.0414.29%12.38%N/APositive News
First Eagle Alternative Capital BDC, Inc. stock logo
FCRD
First Eagle Alternative Capital BDC
$3.30
Stock12.12%$0.4083.33%N/A9/14/2022Analyst Revision
News Coverage
Positive News
High Trading Volume
IBTD
iShares iBonds Dec 2023 Term Treasury ETF
$24.89
0.0%
ETF0.60%$0.15N/AN/AN/APositive News
Korea Electric Power Co. stock logo
KEP
Korea Electric Power
$8.15
-1.1%
Stock6.63%$0.54N/AN/AN/AAnalyst Downgrade
Great Elm Capital Corp. stock logo
GECC
Great Elm Capital
$12.09
+0.1%
Stock14.89%$1.80125.87%-31.34%9/14/2022Positive News
Deswell Industries, Inc. stock logo
DSWL
Deswell Industries
$3.08
-3.8%
Stock6.49%$0.20N/A25.99%N/APositive News
Gap Down
High Trading Volume
BSMM
Invesco BulletShares (R) 2022 Municipal Bond ETF
$25.29
-0.1%
ETF0.32%$0.08N/AN/AN/APositive News
First Trust Enhanced Short Maturity ETF stock logo
FTSM
First Trust Enhanced Short Maturity ETF
$59.47
+0.0%
ETF0.57%$0.34N/AN/AN/AShort Interest ↑
News Coverage
Positive News
Educational Development Co. stock logo
EDUC
Educational Development
$3.35
-0.9%
Stock8.96%$0.3071.43%38.67%N/AAnalyst Report
Gap Up
MIN
MFS Intermediate Income Trust
$2.96
-0.7%
Stock10.81%$0.32N/A-3.30%N/ANegative News
Medalist Diversified REIT, Inc. stock logo
MDRR
Medalist Diversified REIT
$0.89
+0.1%
Stock8.96%$0.08N/A-38.86%N/APositive News
William Penn Bancorporation stock logo
WMPN
William Penn Bancorporation
$11.35
-0.4%
Stock1.06%$0.12N/AN/AN/APositive News
iShares Short Treasury Bond ETF stock logo
SHV
iShares Short Treasury Bond ETF
$110.09
+0.0%
ETF0.29%$0.32N/AN/AN/APositive News
CSI Compressco LP stock logo
CCLP
CSI Compressco
$1.26
+0.8%
Stock3.17%$0.04N/A-62.36%N/APositive News
iShares iBonds Dec 2024 Term Treasury ETF stock logo
IBTE
iShares iBonds Dec 2024 Term Treasury ETF
$24.33
+0.1%
ETF0.95%$0.23N/AN/AN/APositive News
MIND C.T.I. Ltd stock logo
MNDO
MIND C.T.I.
$2.36
-0.4%
Stock11.02%$0.26N/A-4.66%N/APositive News
Mobile TeleSystems Public Joint Stock stock logo
MBT
Mobile TeleSystems Public Joint Stock
$5.50
Stock18.18%$1.00108.70%N/AN/A
Glen Burnie Bancorp stock logo
GLBZ
Glen Burnie Bancorp
$10.25
Stock3.90%$0.40N/AN/AN/APositive News
Grupo Aval Acciones y Valores S.A. stock logo
AVAL
Grupo Aval Acciones y Valores
$3.30
-2.7%
Stock7.88%$0.2644.07%N/AN/A
U.S. Global Investors, Inc. stock logo
GROW
U.S. Global Investors
$4.30
+0.9%
Stock2.09%$0.09N/A37.21%9/9/2022News Coverage
Putnam Master Intermediate Income Trust stock logo
PIM
Putnam Master Intermediate Income Trust
$3.53
-0.6%
Stock7.37%$0.26N/A-3.52%8/23/2022
B2Gold Corp. stock logo
BTG
B2Gold
$3.31
-0.3%
Stock4.83%$0.1644.44%N/AN/A
CorEnergy Infrastructure Trust, Inc. stock logo
CORR
CorEnergy Infrastructure Trust
$2.33
-4.1%
Stock8.58%$0.20N/A-59.45%N/AAnalyst Report
Gap Down
United Security Bancshares stock logo
UBFO
United Security Bancshares
$7.23
-0.7%
Stock6.09%$0.44N/A4.10%N/AAnalyst Report
Positive News
BSMN
Invesco BulletShares (R) 2023 Municipal Bond ETF
$25.19
-0.3%
ETF0.48%$0.12N/AN/AN/APositive News

Investors must know how to distinguish between price and value

Every investor should have some exposure to quality dividend stocks. These are stocks from companies that generate consistent revenue and earnings growth no matter what is happening in the economy. Because of this, these companies generally have strong balance sheets that feature reliable free cash flow (FCF) and a manageable debt load.

However, as is the case with any asset class, investors want to make sure they are not overpaying for dividend stocks. In this article, we’ll explain the importance of dividends and what metrics investors should use to look for cheap dividend stocks.

How Does a Dividend Reward Shareholders?

For those who are new to investing, let’s make sure we’re on the same page. Buying stock means taking an ownership stake in a company. Companies reward their shareholders in several ways. The way that grabs the most headlines is by increasing the value of its stock price.

Companies do this by delivering revenue and earnings that grow on a quarterly and/or annual basis. This generates interest from other investors and the stock price goes up. And if a company is still in a growth phase, the capital growth may outpace that of the broader market.

However, if a company is in a more mature phase of its business, it may not post market-beating gains. That’s where a dividend comes in. Companies that issue a dividend are distributing a percentage of its profits (known as the payout ratio) to investors as a dividend for owning the stock. Many companies pay a dividend every three months (i.e. a quarterly dividend). That means that investors earn this dividend on a regular schedule no matter what is happening with the company’s stock price.

Dividends Are an Important Component of a Stock’s Total Return

The total return on an investment includes interest, capital gains, dividends and other distributions that an investment generates over a period of time. If a company doesn’t issue a dividend, the total return of that investment is almost exclusively limited to capital gains. These are called growth stocks.

As we explained above, when the market is going up, these stocks can outperform the market. However, when the market is in a correction or a bear market, the total return on these stocks can be significantly lower than the broader market.

By contrast, dividend stocks offer investors a dividend in addition to the opportunity for capital gains. This has a smoothing effect on many portfolios. While these stocks may not outperform the market in terms of capital gains, the dividends can help move them closer.

But these stocks really shine in times of market downturns. In this case, the stocks tend to perform “less badly” than growth stocks. In addition, the “rent” that investors collect from the dividend can help trim losses even more.

That’s because in most cases, investors have the ability to reinvest their dividends. This increases the amount of stock an investor owns which increases their capital gains as well as increasing their dividend payout. This creates a wealth-building cycle.

Strong balance sheets allow many companies to continue to pay a dividend year after year. And the best long-term dividend stocks are from companies that increase their dividend payout over a period of consecutive years.

Does Dividend Investing Really Work?

In 2021, Hartford Funds published a study that illustrates the popularity of dividend investing. The study reports that in the last 50 years, dividends and the power of compounding from reinvesting dividends has been responsible for 84% of the total return of the S&P 500 Index. The same study found that in the last 12 years, dividends contributed approximately 17% to the total returns of the index.

What is a Cheap Stock?

Price is what you pay for a stock. Value is what the stock is worth. Experienced investors can point to many examples where one of these scenarios existed:

  • A stock is trading for a low price, but analysts are downgrading the stock. That means analysts believe the lower stock price correctly values the stock. In this case, attempting to buy the dip will likely result in trying to catch a falling knife.
  • A stock is trading at a higher price, but analysts believe that the valuation is correct. That means that investors may have to pay the higher price rather than being able to “buy the dip.”

With that said, there are times when price and value align. By that I mean that there are times when a company’s stock price drops much lower than its intrinsic value. This creates an opportunity where investors can buy an undervalued stock at a cheap price.

One metric that analysts use to determine the value of a stock is its price-to-earnings (P/E) ratio. This is a measure of how much an investor is paying for $1 of the company’s earnings. By itself, a stock’s P/E ratio may not be the best indicator, but when put in context of the company’s sector average, investors can get a better sense of what a “correct” P/E value should be.

For example, technology stocks will tend to have a higher P/E ratio than utility stocks. However, in many cases, investors are willing to pay the higher price for the growth opportunity.

What Specific Metrics Should Investors For to Find Cheap Dividend Stocks?

Investors should still look at an attractive P/E ratio. However, another metric specific to dividend investors is a stock’s dividend yield. A company’s dividend ratio tells an investor how much a company pays in dividends per year relative to the company’s share price. It’s expressed as a percentage.

A dividend boosts a company’s total return. When stock prices are appreciating, a dividend can help boost the performance of a stock to bring it closer to that of a growth stock. However, a reliable and preferably a growing dividend really shines when stock prices are falling. In this case, a dividend can help smooth out some of the market volatility. This is why the best dividend stocks tend to perform “less bad” in a market downturn.

The average dividend yield of stocks on the S&P 500 as of July 2022 is around 1.64%. Therefore many investors will look for a dividend yield that’s higher than this average. MarketBeat is providing a list of dividend stocks that are inexpensive based on where there stock price is relative to their 52-week highs and have a dividend yield above 3%.

When Can Investors Find Cheap Dividend Stocks?

Investors can typically find cheap dividend stocks when the market is going through a correction or within a bear market. When markets begin to fall, institutional investors attempt to “reprice” stocks. Frequently, they overshoot their mark.

A textbook example of this occurred at the onset of the Covid-19 pandemic in 2020. The market sold off broadly and sharply in March 2020. However, within a couple of months, investors realized that – with some notable exceptions – many stocks were significantly undervalued. This led to the broader market ripping to new highs.

And because investors are buying stocks of companies with solid dividends, there’s less concern about market timing. That’s because investors will receive a dividend regardless of what happens in the broader market.

The Cherry on Top is Finding Stocks with a Growing Dividend Payout

If you want to find the absolute best of the best among the cheap dividend stocks, you’ll want to pay attention to the dividend payout. A company’s dividend yield can fluctuate daily based on the company’s current stock price. But the payout is the amount of money per share that investors will receive on an annual basis.

A dividend payout allows investors to know exactly how much income they will earn and/or reinvest. For example if a company’s payout is $4 and it pays a quarterly dividend, investors can expect to receive $1 for every share they own every quarter.

The best companies are ones that have a long history of not only continuing to pay a dividend but also to increase that payout over time. Investors can look at the company’s payout ratio to see if the company’s payout is sustainable based on its anticipated earnings.

 

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