In this article, we will take a look at some of the best affordable dividend stocks.
With the Federal Reserve moving toward rate cuts, dividend-paying stocks could attract renewed interest from investors. Still, not all approaches deliver the same results. The Franklin Templeton Equity Income Fund (FISEX) takes a selective path, targeting high-quality businesses that also generate income. Morningstar has given the fund a four-star rating, and it ranks among the top performers in total returns both this year and last. Matt Quinlan, who oversees the Franklin Equity Income strategy, explained that the team looks for “companies that are leaders” — firms consistently investing, innovating, and expanding to make their business models stronger and more resilient over time.
Morgan Stanley also noted that dividends can help steady portfolios during uncertain periods. Strategist Todd Castagno wrote in an August 14 report that, when risks are high and valuations stretched, dividends can soften volatility and support stock prices. In a slower growth setting with falling interest rates, reliable dividends become even more appealing since cash and bonds lose some of their yield advantage. However, investors are often cautioned against chasing only the highest yields, as those may signal trouble within a company. Instead, the focus is often on firms that can steadily grow their payouts.
Echoing Warren Buffett’s long-held view, many seasoned investors also prefer to buy shares of solid companies that the market undervalues — businesses trading below their true worth but with durable fundamentals to deliver returns over the long haul. Given this, we will take a look at some of the best affordable dividend stocks to buy now.
Our Methodology
To create this list, we screened for dividend stocks with a forward P/E ratio under 16, as of October 2. Then, we picked companies from that list that have a reliable history of paying dividends consistently to their shareholders. The stocks are ranked according to their forward P/Es.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11. Exxon Mobil Corporation (NYSE:XOM)
Forward P/E as of October 2: 15.82
Exxon Mobil Corporation (NYSE:XOM) is an American energy company. It is using artificial intelligence to increase the effectiveness of its work and eventually grow its business.
For example, Exxon Mobil Corporation (NYSE:XOM) has been utilizing machine learning in the past few years to avoid the breakdown of its equipment, raise production levels, and make the process more efficient through automation. It is making the company’s work much easier, and also, the parts of the drilling process that are left are being automated. The intention is that the final stage is the completely automatic drilling where the AI systems can select the most appropriate parameters and, in certain instances, carry out the drilling by themselves, if allowed.
On top of that, Exxon Mobil Corporation (NYSE:XOM) makes use of AI to control the enormous quantities of data the company generates and to avoid ‘data silos’. As machine learning capabilities evolve, both ExxonMobil and other oil majors will be willing to implement these tools more and more.
Furthermore, Exxon Mobil Corporation (NYSE:XOM) is also regarded as a dependable dividend payer and has been increasing its dividend for 42 consecutive years. It offers a quarterly dividend of $0.99 per share, with a dividend yield of 3.51%, as of October 2.
10. JPMorgan Chase & Co. (NYSE:JPM)
Forward P/E as of October 2: 15.62
JPMorgan Chase & Co. (NYSE:JPM) is the most profitable bank out of the big four in the US and is ranked first by both market capitalization and total assets in the whole country. The company announced on September 17 a 7.1% increase in its quarterly dividend to $1.50 per share. It has been giving dividends to shareholders regularly for many years. As of October 2, the stock offers a 1.95% dividend yield. JPM is one of the best dividend stocks to invest in.
JPMorgan Chase & Co. (NYSE:JPM) business is nearly as detailed as it cuts credit cards, raises auto loans, and in the last few years has grown considerably across commercial and investment banking. Besides, the bank has been very energetic in new technology adoption and has made a lot of fintech (financial technology) company investments.
In addition to the huge Chase consumer banking unit, JPMorgan Chase & Co. (NYSE:JPM) is also one of the largest investment banks in the country.
9. Archer-Daniels-Midland Company (NYSE:ADM)
Forward P/E as of October 2: 13.12
Archer-Daniels-Midland Company (NYSE:ADM) is the leading global provider of agricultural processing and trading products, including ingredients for food, animal feed, and biofuels. The company not only farms key crops such as soybeans, corn, and wheat, but it also paces innovation. The company’s achievements include the invention of textured vegetable protein and contributions to high-fructose corn syrup, ethanol, and Omega-3 fatty acids.
Archer-Daniels-Midland Company (NYSE:ADM) is among the world’s largest companies by revenue, as its 2024 revenue stands at $86 billion. The company has been paying dividends for 93 consecutive years. In addition, it remains a Dividend King with 51 consecutive years of dividend raises. Currently, it pays a quarterly dividend of $0.51 per share and has a dividend yield of 3.44%, as of October 2.
Archer-Daniels-Midland Company (NYSE:ADM) experienced consistent profit growth from 2016 to 2022, anchored by strong demand for crops and biofuels. More recently, its profits have been squeezed by deteriorating crush margins in processing soybeans, softer demand in its nutrition unit, and uncertainty over biofuel regulations.
Nevertheless, Archer-Daniels-Midland Company (NYSE:ADM)’s sheer size and the fact that it is vertically integrated offer it a significant competitive advantage. With demand for food and biofuels worldwide increasing, the company has good potential for consistent long-term growth.
