In this article, we discuss 10 cheap dividend stocks with high yields.
In 2022, value stocks did better than growth stocks, marking the first time of value outperformance since 2016. However, in 2023, value stocks faced difficulties due to ongoing problems in the financial sector, especially in banking. Despite this setback, analysts believe that the strong performance of value stocks in 2022 might signal the start of a trend where they outperform for several years. Tom Hancock, a portfolio manager at GMO, spoke about the outlook of value stocks in his recent interview with CNBC. Here is what he said:
“We like to talk about intrinsic value which is companies that can grow and grow at a high return on capital. That can be reasonably priced and that kind of company has been doing very well. I think that kind of trend can continue as long as there is innovation going forward.”
Over time, when we look back at the performance of growth and value stocks, they’ve typically been quite competitive. However, the advantage often leans toward value stocks when we consider the longer-term perspective beneficial for investors. In one of our articles, we delved into the historical performance of value and growth stocks. The report highlighted that value investing has demonstrated remarkable success over many years. Since 1926, it has generated an impressive total return of 1,344,600%. Growth stocks, on the other hand, returned 626,000% during the same period. This comparison highlights the significant advantage value stocks have historically held in terms of long-term returns.
Value dividend stocks can be attractive options for investors seeking a balance between potential growth and consistent income. These stocks typically belong to established companies that are undervalued by the market but still maintain strong fundamentals. Verizon Communications Inc. (NYSE:VZ), Altria Group, Inc. (NYSE:MO), and Pfizer Inc. (NYSE:PFE) are some popular dividend stocks with high yields. In this article, we will discuss some of the best cheap dividend stocks with high yields.
Photo by Dan Dennis on Unsplash
Our Methodology:
To compile this list, we filtered for dividend stocks with a P/E ratio below 20 and dividend yields exceeding 6% as of December 8. From that selection, we chose companies with a proven track record of consistently paying dividends to their shareholders. The ranking of these stocks is based on their P/E ratios, arranged from the highest to the lowest.
10. NextEra Energy Partners, LP (NYSE:NEP)
P/E Ratio as of December 7: 20.07
Dividend Yield as of December 7: 13.01%
NextEra Energy Partners, LP (NYSE:NEP) is a renewable energy company that operates as a limited partnership. The company primarily focuses on acquiring, managing, and owning contracted clean energy projects with stable, long-term cash flows. In the third quarter of 2023, the company reported revenue of $367 million, which showed a 21.5% growth from the same period last year. It ended the quarter with $332 million available in cash and cash equivalents, up from $235 million at the end of December 2022.
NextEra Energy Partners, LP currently pays a quarterly dividend of $0.8675 per share with a dividend yield of 13.01%, as of December 7. It is one of the best dividend stocks on our list as the company has been raising its dividends every quarter since 2015. Verizon Communications Inc., Altria Group, Inc., and Pfizer Inc. are some other high-yield dividend stocks to consider.
At the end of Q3 2023, 19 hedge funds in Insider Monkey’s database reported having stakes in NextEra Energy Partners, LP, compared with 23 in the previous quarter. The consolidated value of these stakes is nearly $191 million.
9. Leggett & Platt, Incorporated (NYSE:LEG)
P/E Ratio as of December 7: 16.79
Dividend Yield as of December 7: 7.00%
Leggett & Platt, Incorporated is a diversified manufacturing company that produces various engineered components and products across multiple industries. On November 7, the company declared a quarterly dividend of $0.46 per share, which was in line with its previous dividend. The company is a Dividend King, with 52 consecutive years of dividend growth under its belt. As of December 7, the stock has a dividend yield of 7.00%.
Leggett & Platt, Incorporated generated $1.18 billion in revenues in the third quarter of 2023, which fell by 9% from the same period last year. The company’s operating cash flow for the quarter came in at $144 million, showing an increase of $78 million versus the same quarter last year. For FY23, the company expects to return $240 million to shareholders through dividends.
As of the close of Q3 2023, 19 hedge funds tracked by Insider Monkey owned stakes in Leggett & Platt, Incorporated, up from 18 in the preceding quarter. The overall value of these stakes is more than $146 million. With roughly 3 million shares, Millennium Management was the company’s leading stakeholder in Q3.
8. Nu Skin Enterprises, Inc. (NYSE:NUS)
P/E Ratio as of December 7: 15.49
Dividend Yield as of December 7: 8.70%
Nu Skin Enterprises, Inc. (NYSE:NUS) is a Utah-based personal care products company. The company’s product line includes skincare systems, facial cleansers, moisturizers, anti-aging solutions, and body care items. The company currently pays a quarterly dividend of $0.39 per share and has a dividend yield of 8.70%, as of December 7. Its dividend growth streak spans over 22 years, which makes NUS one of the best dividend stocks on our list.
Nu Skin Enterprises, Inc. reported a strong cash position in the third quarter of 2023, as it ended the quarter with over $233.3 million available in cash and cash equivalents. Moreover, the company returned approximately $19.5 million to shareholders through dividends.
Insider Monkey’s database for the third quarter of 2023 indicated that 19 hedge funds owned stakes in Nu Skin Enterprises, Inc., up from 18 in the previous quarter. These stakes are collectively valued at over $93.3 million.
7. Hess Midstream LP (NYSE:HESM)
P/E Ratio as of December 7: 15.17
Dividend Yield as of December 7: 8.02%
Hess Midstream LP (NYSE:HESM) is a midstream energy company that primarily focuses on the gathering, processing, storage, and transportation of crude oil and natural gas. In the third quarter of 2023, the company reported revenue of $363 million, which beat analysts’ estimates by $20.6 million. Not only this, the company’s revenue also showed an 8.5% growth from the same period last year. Its operating cash flow amounted to over $215.5 million and its adjusted free cash flow was $162.7 million.
Hess Midstream LP offers a quarterly dividend of $0.6175 per share for a dividend yield of 8.02%, as of December 7. It is one of the best dividend stocks on our list as the company has been growing its dividends consistently for the past six years.
The number of hedge funds in Insider Monkey’s database owning stakes in Hess Midstream LP grew to 21 in the third quarter of 2023, from 15 a quarter earlier. These stakes are worth over $121.8 million in total. Among these hedge funds, Anomaly Capital Management was the company’s leading stakeholder in Q3.
6. Delek Logistics Partners, LP (NYSE:DKL)
P/E Ratio as of December 7: 14.6
Dividend Yield as of December 7: 8.38%
Delek Logistics Partners, LP (NYSE:DKL) is a Tennessee-based logistics company operating in the energy sector. It primarily focuses on owning, operating, acquiring, and constructing logistics and marketing assets for crude oil and refined products. On October 26, the company declared a quarterly dividend of $1.045 per share, having raised it by 1%. Through this increase, the company achieved its 43rd consecutive quarter of dividend growth. As of December 7, the stock has a dividend yield of 8.38%.
In addition to DLK, investors and analysts are also paying attention to other high-dividend stocks, such as Verizon Communications Inc., Altria Group, Inc., and Pfizer Inc..
As of the end of September 2023, Ken Griffin’s Citadel Investment Group was the only stakeholder of Delek Logistics Partners, LP, owning stakes worth $106,100.
5. Enterprise Products Partners L.P. (NYSE:EPD)
P/E Ratio as of December 7: 10.70
Dividend Yield as of December 7: 7.60%
Enterprise Products Partners L.P. (NYSE:EPD) is an American midstream energy company that operates across various aspects of the energy value chain. The company’s quarterly dividend currently stands at $0.50 per share and has a dividend yield of 7.60%, as of December 7. It is one of the best dividend stocks on our list as the company has been raising its dividends for 24 consecutive years.
The number of hedge funds in Insider Monkey’s database owning stakes in Enterprise Products Partners L.P. stood at 25 in Q3 2023, which remained the same as the previous quarter. These stakes have a total value of over $325.2 million.
4. Washington Trust Bancorp, Inc. (NASDAQ:WASH)
P/E Ratio as of December 7: 9.66
Dividend Yield as of December 7: 7.70%
Washington Trust Bancorp, Inc. (NASDAQ:WASH) is an American bank holding company that provides a range of financial services, including commercial banking, wealth management, investment management, and trust services. It is one of the best dividend stocks on our list as the company maintains a 12-year streak of consistent dividend growth. The company offers a quarterly dividend of $0.56 per share and has a dividend yield of 7.70%, as of December 7.
At the end of the third quarter of 2023, 7 hedge funds tracked by Insider Monkey reported holding stakes in Washington Trust Bancorp, Inc., up from 6 in the preceding quarter. The overall value of these stakes is roughly $19 million.
3. Barings BDC, Inc. (NYSE:BBDC)
P/E Ratio as of December 7: 9.64
Dividend Yield as of December 7: 12.00%
Barings BDC, Inc. (NYSE:BBDC) is a business development company that primarily focuses on providing financing solutions to middle-market companies. The company has raised its dividends every year since 2018 and it offers a quarterly dividend of $0.26 per share. As of December 7, the stock’s dividend yield came in at 12%.
As of the end of September 2023, 13 hedge funds owned stakes in Barings BDC, Inc., up from 12 in the previous quarter, as per Insider Monkey’s database. The collective value of these stakes is over $46.6 million. With over 2.4 million shares, Callodine Capital Management was the company’s leading stakeholder in Q3.
2. Altria Group, Inc. (NYSE:MO)
P/E Ratio as of December 7: 8.45
Dividend Yield as of December 7: 9.46%
Altria Group, Inc. is an American multinational tobacco company. The company has been growing its dividends for the past 54 consecutive years and it pays a quarterly dividend of $0.98 per share. The stock’s dividend yield on December 7 came in at 9.46%.
Of the 910 hedge funds tracked by Insider Monkey at the end of Q3 2023, 40 funds owned investments in Altria Group, Inc.. The total value of stakes owned by these hedge funds is over $565 million.
1. Verizon Communications Inc. (NYSE:VZ)
P/E Ratio as of December 7: 7.76
Dividend Yield as of December 7: 6.89%
Verizon Communications Inc. tops our list of the best dividend stocks with high yields. The multinational telecommunications company has raised its payouts for 17 years in a row and it currently offers a quarterly dividend of $0.665 per share. The stock has a dividend yield of 6.89%, as of December 7.
The number of hedge funds tracked by Insider Monkey owning stakes in Verizon Communications Inc. jumped to 61 in Q3 2023, from 53 in the previous quarter. The collective value of these stakes is roughly $1.4 billion.
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This article is originally published at Insider Monkey.
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