QQQ   337.27 (+1.86%)
AAPL   175.05 (+1.37%)
MSFT   318.52 (+1.44%)
META   246.85 (+1.80%)
GOOGL   122.83 (+1.65%)
AMZN   118.15 (+2.29%)
TSLA   176.89 (+1.74%)
NVDA   316.78 (+4.97%)
NIO   7.82 (-2.62%)
BABA   85.77 (-5.41%)
AMD   107.93 (+4.03%)
T   16.55 (-0.66%)
F   11.64 (+1.22%)
MU   67.57 (+4.08%)
CGC   1.05 (+0.00%)
GE   104.01 (+0.52%)
DIS   93.76 (+1.07%)
AMC   5.07 (-0.59%)
PFE   36.48 (-0.73%)
PYPL   61.27 (-0.31%)
NFLX   371.29 (+9.22%)
QQQ   337.27 (+1.86%)
AAPL   175.05 (+1.37%)
MSFT   318.52 (+1.44%)
META   246.85 (+1.80%)
GOOGL   122.83 (+1.65%)
AMZN   118.15 (+2.29%)
TSLA   176.89 (+1.74%)
NVDA   316.78 (+4.97%)
NIO   7.82 (-2.62%)
BABA   85.77 (-5.41%)
AMD   107.93 (+4.03%)
T   16.55 (-0.66%)
F   11.64 (+1.22%)
MU   67.57 (+4.08%)
CGC   1.05 (+0.00%)
GE   104.01 (+0.52%)
DIS   93.76 (+1.07%)
AMC   5.07 (-0.59%)
PFE   36.48 (-0.73%)
PYPL   61.27 (-0.31%)
NFLX   371.29 (+9.22%)
QQQ   337.27 (+1.86%)
AAPL   175.05 (+1.37%)
MSFT   318.52 (+1.44%)
META   246.85 (+1.80%)
GOOGL   122.83 (+1.65%)
AMZN   118.15 (+2.29%)
TSLA   176.89 (+1.74%)
NVDA   316.78 (+4.97%)
NIO   7.82 (-2.62%)
BABA   85.77 (-5.41%)
AMD   107.93 (+4.03%)
T   16.55 (-0.66%)
F   11.64 (+1.22%)
MU   67.57 (+4.08%)
CGC   1.05 (+0.00%)
GE   104.01 (+0.52%)
DIS   93.76 (+1.07%)
AMC   5.07 (-0.59%)
PFE   36.48 (-0.73%)
PYPL   61.27 (-0.31%)
NFLX   371.29 (+9.22%)
QQQ   337.27 (+1.86%)
AAPL   175.05 (+1.37%)
MSFT   318.52 (+1.44%)
META   246.85 (+1.80%)
GOOGL   122.83 (+1.65%)
AMZN   118.15 (+2.29%)
TSLA   176.89 (+1.74%)
NVDA   316.78 (+4.97%)
NIO   7.82 (-2.62%)
BABA   85.77 (-5.41%)
AMD   107.93 (+4.03%)
T   16.55 (-0.66%)
F   11.64 (+1.22%)
MU   67.57 (+4.08%)
CGC   1.05 (+0.00%)
GE   104.01 (+0.52%)
DIS   93.76 (+1.07%)
AMC   5.07 (-0.59%)
PFE   36.48 (-0.73%)
PYPL   61.27 (-0.31%)
NFLX   371.29 (+9.22%)

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.
Available with a MarketBeat All Access Subscription
Media SentimentUpgrade to All Access to use the All Sentiments Filter
Analyst consensus is the average investment recommendation among Wall Street research analysts.
Available with a MarketBeat All Access Subscription
Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PriceTypeDividend YieldAnnual PayoutPayout Ratio3-Year Dividend GrowthEx-Dividend DateIndicator(s)
ViacomCBS Inc. stock logo
First Trust Dividend Strength ETF
NortonLifeLock Inc stock logo
Brookfield Asset Management Reinsurance Partners Ltd. stock logo
Brookfield Asset Management Reinsurance Partners
Stock18.97%$6.17N/AN/AN/APositive News
WVS Financial Corp. stock logo
WVS Financial
Provident Financial Holdings, Inc. stock logo
Provident Financial
Stock4.78%$0.5639.72%N/AN/AAnalyst Report
Hanover Bancorp, Inc. stock logo
Hanover Bancorp
Stock2.30%$0.40N/AN/AN/AGap Down
IF Bancorp, Inc. stock logo
IF Bancorp
Partners Bancorp stock logo
Partners Bancorp
Stock2.82%$0.16N/AN/AN/APositive News
LINKBANCORP, Inc. stock logo
Delaware Investments National Municipal Income Fund stock logo
Delaware Investments National Municipal Income Fund
Nuveen Missouri Quality Municipal Income Fund
Putnam Master Intermediate Income Trust stock logo
Putnam Master Intermediate Income Trust
MFS Intermediate High Income Fund
ETF11.73%$0.19N/A-7.38%N/AHigh Trading Volume
VersaBank stock logo
Credit Suisse Group AG stock logo
Credit Suisse Group
Stock5.77%$0.05N/AN/AN/AAnalyst Report
Nuveen Arizona Quality Municipal Income Fund stock logo
Nuveen Arizona Quality Municipal Income Fund
High Income Securities Fund stock logo
High Income Securities Fund
Nokia Oyj stock logo
Nokia Oyj
Stock2.24%$0.0918.75%N/AN/AAnalyst Downgrade
Analyst Revision
News Coverage
USD Partners LP stock logo
USD Partners
Stock31.01%$0.49128.95%-30.36%N/AAnalyst Report
Negative News
Cohen & Steers Total Return Realty Fund, Inc. stock logo
Cohen & Steers Total Return Realty Fund
ETF11.12%$1.23N/AN/A6/13/2023Positive News
Highland/iBoxx Senior Loan ETF stock logo
Highland/iBoxx Senior Loan ETF
ETF7.21%$1.04N/AN/AN/ADividend Increase
Positive News
Presidio Property Trust, Inc. stock logo
Presidio Property Trust
Stock10.62%$0.09N/AN/AN/AGap Down
Putnam Premier Income Trust stock logo
Putnam Premier Income Trust
Mid-Southern Bancorp, Inc. stock logo
Mid-Southern Bancorp
Stock2.62%$0.24N/A31.04%N/APositive News
ProShares UltraPro Short QQQ stock logo
ProShares UltraPro Short QQQ
Stock1.38%$0.35N/AN/AN/APositive News
Community West Bancshares stock logo
Community West Bancshares
Stock3.06%$0.3226.89%11.12%N/AHigh Trading Volume
MFS Intermediate Income Trust
Elme Communities stock logo
Elme Communities
Stock4.58%$0.72N/AN/A6/21/2023High Trading Volume
Claros Mortgage Trust, Inc. stock logo
Claros Mortgage Trust
Stock14.06%$1.48N/AN/AN/APositive News
MIND C.T.I. Ltd stock logo
Atlantic American Co. stock logo
Atlantic American
Stock0.91%$0.02N/AN/AN/AUpcoming Earnings
Analyst Report
News Coverage
Riverview Bancorp, Inc. stock logo
Riverview Bancorp
Stock5.62%$0.2442.86%9.29%N/AAnalyst Report
iShares iBonds Dec 2023 Term Treasury ETF stock logo
iShares iBonds Dec 2023 Term Treasury ETF
Industrial Logistics Properties Trust stock logo
Industrial Logistics Properties Trust
Clipper Realty Inc. stock logo
Clipper Realty
The Gabelli Convertible and Income Securities Fund Inc. stock logo
The Gabelli Convertible and Income Securities Fund
ETF11.11%$0.48N/AN/AN/APositive News
MFS Government Markets Income Trust stock logo
MFS Government Markets Income Trust
MFS Special Value Trust
Telefonaktiebolaget LM Ericsson (publ) stock logo
Telefonaktiebolaget LM Ericsson (publ)
Stock3.24%$0.1728.81%N/AN/AAnalyst Report
NL Industries, Inc. stock logo
NL Industries
Stock4.97%$0.2841.18%N/AN/AAnalyst Report
Healthpeak Properties, Inc. stock logo
Healthpeak Properties
Deswell Industries, Inc. stock logo
Deswell Industries
Hennessy Advisors, Inc. stock logo
Hennessy Advisors
Stock7.98%$0.55N/A3.57%5/22/2023News Coverage
U.S. Energy Corp. stock logo
U.S. Energy
Stock6.67%$0.09300.00%N/A5/18/2023Analyst Downgrade
Kentucky First Federal Bancorp stock logo
Kentucky First Federal Bancorp
CSI Compressco LP stock logo
CSI Compressco
Stock3.36%$0.04N/AN/AN/APositive News
Martin Midstream Partners L.P. stock logo
Martin Midstream Partners
Stock0.85%$0.0211.11%-74.80%N/AAnalyst Report
News Coverage
Gap Down
Ames National Co. stock logo
Ames National
Stock6.03%$1.08N/A4.00%7/31/2023Analyst Report
John Hancock Premium Dividend Fund stock logo
John Hancock Premium Dividend Fund

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.

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.

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.

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.

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.

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%.

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.

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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