In this article, we will discuss 11 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. 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., 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, Medtronic plc (NYSE:MDT), and The Coca-Cola Company, Star Group, L.P. 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. 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., 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. 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. 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., 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. in its recently-published Q3 2022 investor letter. Here is what the firm has to say:
“Viatris Inc. (NASDAQ:VTRS) fell 17.8%2 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. 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. 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. 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., 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 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, Medtronic plc (NYSE:MDT), and The Coca-Cola Company.
In October, Morgan Stanley maintained its Overweight rating on Ford Motor Company 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, the same as in the previous quarter. The collective value of these stakes is over $608.7 million.
Leaven Partners mentioned Ford Motor Company 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%.”
5. Arbor Realty Trust, Inc. (NYSE:ABR)
Share Price as of October 30: $13.83
Arbor Realty Trust, Inc. (NYSE:ABR) is an American real estate investment trust company that provides debt capital for the multifamily loan and commercial real estate industries. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past nine years. Currently, it pays a quarterly dividend of $0.39 per share and has a dividend yield of 11.28%, as of October 30.
In October, Morgan Stanley maintained an Overweight rating on Arbor Realty Trust, Inc. with a $15 price target. The firm noted that basic fundamentals of mortgage REITs seem to be stable in the third quarter.
At the end of June 2022, 12 hedge funds tracked by Insider Monkey reported owning stakes in Arbor Realty Trust, Inc., down from 14 in the previous quarter. These stakes hold a collective value of over $74.5 million. With 1.4 million shares, Balyasny Asset Management was one of the company’s leading stakeholders in Q2.
4. Hewlett Packard Enterprise Company (NYSE:HPE)
Share Price as of October 30: $14.39
Hewlett Packard Enterprise Company (NYSE:HPE) is a Texas-based multinational information technology company. As consumer demand for technology products is growing after the pandemic as well, Barclays maintained an Overweight rating on the stock in October with a $17 price target.
In the third quarter of 2022, Hewlett Packard Enterprise Company reported revenue of roughly $7 billion, showcasing a 0.7% growth from the same period last year. The company’s cash flow from operations amounted to over $1.3 billion and free cash flow stood at $587 million. Within this cash flow, the company returned $353 million to shareholders through dividends and share repurchases.
Hewlett Packard Enterprise Company hasn’t raised its dividend since 2019 due to the pandemic, however, its payouts remained consistent during this period. The company pays a quarterly dividend of $0.12 per share and has a dividend yield of 3.34%, as of October 30.
At the end of Q2 2022, 37 hedge funds tracked by Insider Monkey owned stakes in Hewlett Packard Enterprise Company, compared with 43 in the previous quarter. The collective value of these stakes is roughly $710 million.
3. Kennedy-Wilson Holdings, Inc. (NYSE:KW)
Share Price as of October 30: $16.65
Kennedy-Wilson Holdings, Inc. (NYSE:KW) is a California-based real estate investment firm that acquires undervalued commercial and residential assets in high-growth markets. The company reported a strong cash position in Q2 2022 which secured its dividend payments. It reported an operating cash flow of $37.4 million and its free cash flow came in at $4.3 million. Moreover, the company had over $460 million available in cash and cash equivalents.
Kennedy-Wilson Holdings, Inc. currently pays a quarterly dividend of $0.24 per share. The company has raised its dividends 10 years in a row, which makes it one of the best dividend stocks under $20. As of October 30, the stock has a dividend yield of 5.77%.
In September, Evercore ISI started coverage of Kennedy-Wilson Holdings, Inc. with an Outperform rating and a $24 price target.
At the end of the June quarter, 11 hedge funds in Insider Money’s database owned stakes in Kennedy-Wilson Holdings, Inc., the same as in the previous quarter. These stakes hold a collective value of nearly $450 million, compared with $577 million worth of stakes owned by hedge funds a quarter earlier.
2. USA Compression Partners, LP (NYSE:USAC)
Share Price as of October 30: $17.97
USA Compression Partners, LP (NYSE:USAC) is an American master limited partnership that is one of the country’s largest independent providers of natural gas compression services. The company pays a quarterly dividend of $0.525 per share and has a dividend yield of 11.69%, as recorded on October 30.
In the second quarter of 2022, USA Compression Partners, LP reported a distributable cash flow of $55.6 million, compared with $52.5 million during the same period last year. Its revenue also showed a 9.5% year-over-year growth to $171.5 million.
At the end of Q2 2022, PEAK6 Capital Management was the only shareholder of USA Compression Partners, LP, owning stakes worth $427,000.
1. KeyCorp (NYSE:KEY)
Share Price as of October 30: $18.10
KeyCorp (NYSE:KEY) is an Ohio-based retail banking company that provides financial services to retail, small businesses, and commercial and investment clients. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past 11 years. Moreover, it has raised its dividends at a CAGR of 16.72% in the past five years, which makes it one of the best dividend stocks. The company pays a quarterly dividend of $0.195 per share and has a dividend yield of 4.31%, as of October 30.
In Q3 2022, KeyCorp posted revenue of $1.89 billion, up 4% from the same period last year. During the quarter, the company’s management approved the remaining $790 million existing share repurchase authorization.
In October, Morgan Stanley maintained an Equal Weight rating on KeyCorp with a $22 price target, highlighting the company’s fund loan growth.
As of the close of Q2 2022, 37 hedge funds tracked by Insider Monkey owned stakes in KeyCorp, down from 38 in the previous quarter. These stakes have a total value of over $338.4 million. Adage Capital Management was the company’s leading stakeholder in Q2, owning stakes worth over $77 million.
You can also take a look at 10 Best Pharma Dividend Stocks To Buy and 11 Best UK Stocks To Buy Now
Follow Insider Monkey on Twitter
Suggested articles:
- 15 Biggest Indian Companies by Market Cap
- 15 Biggest Internet Companies in the World
- 10 Largest Gas Station Chains in the US
This article is originally published at Insider Monkey.
Hedge Fund Resource Center