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11 Best Dividend Stocks Under $20

In this article, we will discuss 11 best dividend stocks under $20. You can skip our detailed analysis of dividend stocks and their returns in the past, and go directly to read 5 Best Dividend Stocks Under $20

Before dividend stocks, growth companies were all the rage as they reinvested capital to grow their businesses. The trend started with the rise of tech stocks in the 1990s that were focused on growth. However, the volatile stock market has brought dividend stocks into the limelight this year. Investors are looking for a way to generate returns in this period of slow economic growth and are turning to dividend stocks. Historically, dividend stocks have shown tremendous performance during inflationary periods.

According to a report by AllianceBernstein, dividend-paying stocks protect against inflation with long-term return potential. The report also mentioned that high-dividend stocks delivered a risk-adjusted return of 0.83% from 1971 to 2022 through August, compared with the S&P 500’s risk-adjusted return of 0.71%. Not only do dividend stocks perform better during inflationary periods but these securities have also outpaced inflation historically. Over the past 150 years, dividends by US companies grew by 3.7% annually, compared with a 2% growth in inflation, according to a report by iShares. The report also highlighted that shares of the companies that initiated and grew their dividends in the last 40 years have outperformed non-dividend companies.

Quality companies that pay regular dividends to shareholders are less volatile than their peers as they have strong balance sheets. Moreover, dividend growers have also delivered strong returns to shareholders in the past. VanEck referred to data by Morningstar in one of its reports, which showed that US dividend growth stocks fell by 10.07% from January to May this year, compared with a 12.76% decline in the S&P 500.

Dividend companies like Carlisle Companies Incorporated (NYSE:CSL), Medtronic plc (NYSE:MDT), and The Coca-Cola Company (NYSE:KO) are notable in this regard as they have been raising their dividends for a long time and also have sound financial health.

Our Methodology:

The companies mentioned below pay dividends to shareholders and have share prices below $20. These stocks can offer good opportunities during this ongoing inflation due to their share prices and regular dividends.

Best Dividend Stocks Under $20

11. Star Group, L.P. (NYSE:SGU)

Share Price as of October 30: $8.58

Star Group, L.P. (NYSE:SGU) is an American manufacturer of home heating and air conditioning products and services for commercial and residential customers. The company has been making uninterrupted dividend payments to its shareholders since 1996. It has also raised its dividends for nine years in a row, which makes it one of the best dividend stocks on our list. The company currently offers $0.1525 per share in quarterly dividends, with a dividend yield of 7.11%, as of October 30.

In fiscal Q3 2022, Star Group, L.P. (NYSE:SGU) reported an operating cash flow of $74 million while its free cash flow came in at $70 million. The company generated $440 million in revenues, which showed a 55% growth from the same period last year.

At the end of Q2 2022, 9 hedge funds tracked by Insider Monkey owned stakes in Star Group, L.P. (NYSE:SGU), up from 8 a quarter earlier. The collective value of these stakes is over $50.3 million. With nearly 3.5 million shares, Bandera Partners was the company’s leading stakeholder in Q2.

In addition to some of the best dividend stocks like Carlisle Companies Incorporated (NYSE:CSL), Medtronic plc (NYSE:MDT), and The Coca-Cola Company (NYSE:KO), Star Group, L.P. (NYSE:SGU) can also be a good addition to dividend portfolios.

10. Hennessy Advisors, Inc. (NASDAQ:HNNA)

Share Price as of October 30: $8.83

Hennessy Advisors, Inc. (NASDAQ:HNNA) is an American company that specializes in mutual fund services. In its fiscal Q3 2022 earnings, the company reported growth in its cash generation. Its operating cash flow came in at $2.7 million, compared with $2.3 million in the previous quarter. Moreover, the company’s free cash flow also jumped to $2.65 million, from $2.2 million in the preceding quarter. During Q3, the company also expanded its share repurchase program and now has over 1 million shares eligible for repurchase.

On October 27, Hennessy Advisors, Inc. (NASDAQ:HNNA) declared a quarterly dividend of $0.1375 per share, in line with its previous dividend. As of October 30, the stock has a dividend yield of 6.23%.

At the end of Q2 2022, Jim Simons’ Renaissance Technologies was the only stakeholder of Hennessy Advisors, Inc. (NASDAQ:HNNA), owning stakes worth over $1.12 million.

9. Viatris Inc. (NASDAQ:VTRS)

Share Price as of October 30: $10.07

Viatris Inc. (NASDAQ:VTRS) is an American global pharmaceutical and healthcare company. It develops innovative medical solutions to improve patients’ health. In October, Barclays maintained an Overweight rating on the stock with a $16 price target, presenting an overall positive stance on specialty pharmaceuticals.

In the second quarter of 2022, Viatris Inc. (NASDAQ:VTRS) reported a strong cash position. The company’s operating cash flow came in at $1.9 billion and its free cash flow stood at $1.8 billion. It also paid down $1.5 billion in debt in the first half of the year.

Viatris Inc. (NASDAQ:VTRS) initiated its dividend policy in 2021 and has raised its dividend once since then. It currently pays a quarterly dividend of $0.12 per share and has a dividend yield of 4.77%, as of October 30.

At the end of Q2 2022, 50 hedge funds in Insider Monkey’s database owned stakes in Viatris Inc. (NASDAQ:VTRS), compared with 55 a quarter earlier. These stakes have a collective value of over $1.23 billion. Camber Capital Management was the company’s leading stakeholder in Q2.

Miller Value Partners mentioned Viatris Inc. (NASDAQ:VTRS) in its recently-published Q3 2022 investor letter. Here is what the firm has to say:

“Viatris Inc. (NASDAQ:VTRS) fell 17.8%during the quarter. Viatris reported 2Q22 revenue of $4.12 billion, -3% Y/Y on an operational basis, below consensus of $4.19 billion, and diluted EPS of $0.26, compared to a net loss per share of -$0.23 in 2Q21, ahead of analyst expectations for EPS of $0.19. The company generated 2Q22 FCF of $718.6 million, bringing TTM FCF to $3,082.9 million, or a FCF yield of 26.6%. In the 1H22, Viatris retired $1.5 billion in debt, which puts the company well on track to achieve its FY22 debt paydown target of $2.0 billion. While the company lowered FY22 revenue guidance to be in a range of $16.2-16.7 billion, compared to previous guidance for revenue of $17-17.5 billion, this revision is solely attributable to the incremental impact of FX headwinds. The company reaffirmed FY22 guidance for Adjusted EBITDA of $5.8-6.2 billion (36.5% margin at midpoint) and FCF of $2.5-2.9 billion, or a forward FCF yield of 23.3%. The company generated approximately $84 million in new product revenues in 2Q22, bringing 1H22 revenues to $205 million, which were primarily driven by interchangeable Semglee in the US, and the company remains on track to achieve ~$600 million (3.7% of FY22 guided revenue at the midpoint) in FY22 new product revenues.”

8. Medical Properties Trust, Inc. (NYSE:MPW)

Share Price as of October 30: $11.59

Medical Properties Trust, Inc. (NYSE:MPW) is a real estate investment trust company that mainly invests in healthcare facilities. The company is headquartered in Alabama, US.

In the third quarter of 2022, Medical Properties Trust, Inc. (NYSE:MPW) reported an FFO of $0.45, which fell in line with the Street estimates. At the end of September, the company had roughly $300 million in cash and cash equivalents while its total assets amounted to over $19 billion.

Medical Properties Trust, Inc. (NYSE:MPW) pays a quarterly dividend of $0.29 per share. The company has been raising its dividends consistently for the past nine years, which places it as one of the best dividend stocks on our list. Moreover, the company’s third-quarter payout of AFFO per share stands at 81%. As of October 30, the stock has a dividend yield of 10.01%.

Barclays maintained an Overweight rating on Medical Properties Trust, Inc. (NYSE:MPW) with a $19 price target, expecting a sequential improvement across the healthcare services sector in the upcoming quarters.

As of the close of Q2 2022, 15 hedge funds tracked by Insider Monkey owned stakes in Medical Properties Trust, Inc. (NYSE:MPW), compared with 16 in the previous quarter. These stakes have a total value of over $238.5 million. Cardinal Capital was the company’s largest shareholder with over 5 million shares.

7. Amcor plc (NYSE:AMCR)

Share Price as of October 30: $11.75

Amcor plc (NYSE:AMCR) is an Australian global packaging company that develops and produces flexible packaging, containers, and cartons for a wide range of businesses. The company’s dividend growth streak is going strong at 39 years. It currently pays a quarterly dividend of $0.12 per share and has a dividend yield of 4.09%, as of October 30.

Amcor plc (NYSE:AMCR), one of the best dividend stocks on our list, reported a strong cash position in Q2 2022. The company’s adjusted free cash flow remained in line with its guidance at $1.06 billion and its operating cash flow came in at $937 million.  During the quarter, the company returned over $600 million to shareholders in share repurchases.

In October, BofA double upgraded Amcor plc (NYSE:AMCR) to Buy with a $13 price target. The firm called the Packaging sector a cheap group and recommends investors buy these defensive stocks.

At the end of Q2 2022, 20 hedge funds tracked by Insider Monkey owned stakes in Amcor plc (NYSE:AMCR), the same as in the previous quarter. The collective value of these stakes is over $252.4 million. Polaris Capital Management was the company’s leading stakeholder in Q2, owning stakes worth roughly $200 million.

6. Ford Motor Company (NYSE:F)

Share Price as of October 30: $13.26

Ford Motor Company (NYSE:F) is an American multinational automobile manufacturing company that also sells automobiles and commercial vehicles. In Q3 2022, the company reported revenue of $37.2 billion, up 12% from the same period last year. The company’s operating cash flow came in at $3.8 billion and its adjusted free cash flow stood at $3.6 billion.

In Q3 of 2021, Ford Motor Company (NYSE:F) reinstated its dividends after ceasing dividend payments for two quarters in recognition of the pandemic. It currently pays a quarterly dividend of $0.15 per share and has a dividend yield of 4.52%, as of October 30. The company can be a good addition to dividend portfolios alongside Carlisle Companies Incorporated (NYSE:CSL), Medtronic plc (NYSE:MDT), and The Coca-Cola Company (NYSE:KO).

In October, Morgan Stanley maintained its Overweight rating on Ford Motor Company (NYSE:F) with a $14 price target. The firm mentioned that automobile companies are solid cash generators that provide great investment opportunities in this market.

As of the close of Q2 2022, 46 hedge funds in Insider Monkey’s database owned stakes in Ford Motor Company (NYSE:F), the same as in the previous quarter. The collective value of these stakes is over $608.7 million.

Leaven Partners mentioned Ford Motor Company (NYSE:F) in its third-quarter 2022 investor letter. Here’s what the firm said:

“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”

Click to continue reading and see 5 Best Dividend Stocks Under $20

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Disclosure. None. 11 Best Dividend Stocks Under $20 is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

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The “Toll Booth” Operator of the AI Energy Boom

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A New Dawn is Coming to U.S. Stocks

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Click to continue reading…