In this article, we discuss 12 cheap high dividend stocks to buy right now. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Cheap High Dividend Stocks To Buy Right Now.
Dividend stocks have become increasingly popular. When considering investment in them, the emphasis is often on high yields. Investors prioritize high yields because they contribute to the overall return on investment, alongside the increase in the stock’s value. The goal is to maximize returns by combining the income earned from dividends with the potential for the stock’s price to go up.
Over time, multiple reports have pointed out the impressive performance of stocks that offer high dividends. The S&P Sector-Neutral High Yield Dividend Aristocrats, which tracks the performance of high-yielding dividend stocks including Broadcom Inc. (NASDAQ:AVGO), International Business Machines Corporation (NYSE:IBM), and Verizon Communications Inc. (NYSE:VZ), showed less overall volatility for the period between Jan. 31, 2005, and July 31, 2023 compared to the benchmark, resulting in better returns when accounting for risk. Moreover, the maximum drop in value during that time was reduced by about 5%, as reported by S&P Dow Jones Indices. The report also mentioned that the index has acted as a safeguard during times of volatility as it generally performed better than the benchmark, especially when the VIX level exceeded 20, and it showed the most significant outperformance when the VIX level was above 30. The index is down by just 0.34% year-to-date compared with a 3.46% decline in the S&P 500 Dividend Aristocrats Index.
Given the strong performance of high dividend yields in the past, investors often consider a wise strategy of investing in cheap dividend stocks with high yields. By combining high yields with the potential for stock price appreciation, investors aim to maximize their overall return on investment. Newton Investment Management, a London-based firm, published a report on dividend stocks in April this year. The report emphasizes the comparison between the valuation of stocks with higher yields and those with lower yields. As of April, stocks with above-average yields are priced significantly lower than stocks with below-average yields when considering metrics like price-to-book (P/B) and price-to-earnings (P/E).
The report also referred to a 2020 research paper from the Centre for Endowment Asset Management and the University of North Carolina and found that investing in portfolios with higher yields provides better returns for investors. The study, spanning nearly a century from July 1928 to June 2019, indicates that higher-yielding dividend stocks tend to yield higher future returns based on the data analysis. In this article, we will take a look at some of the best cheap dividend stocks with high yields.
Image by Sergei Tokmakov Terms.Law from Pixabay
Our Methodology:
To compile this list, we filtered for dividend stocks with a P/E ratio below 15 and dividend yields exceeding 7% as of November 11. 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.
12. W. P. Carey Inc. (NYSE:WPC)
P/E Ratio as of November 11: 14.87
Dividend Yield as of November 11: 7.91%
W. P. Carey Inc. (NYSE:WPC) is an American real estate investment trust company that specializes in providing long-term sale-leaseback and build-to-suit financing solutions for companies. On September 28, the company declared a 0.2% hike in its quarterly dividend to $1.071 per share. Through this increase, the company took its dividend growth streak to 13 years, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 7.91%, as of November 11.
In the third quarter of 2023, W. P. Carey Inc. (NYSE:WPC) reported revenue of $448.6 million, which showed a 17% growth from the same period last year. The company’s cash position also remained strong as it had $136.4 million available in cash and cash equivalents.
WPC can be added to dividend portfolios alongside some popular dividend stocks such as Broadcom Inc. (NASDAQ:AVGO), International Business Machines Corporation (NYSE:IBM), and Verizon Communications Inc. (NYSE:VZ).
At the end of Q2 2023, 21 hedge funds tracked by Insider Monkey reported having stakes in W. P. Carey Inc. (NYSE:WPC), up from 19 in the previous quarter. The consolidated value of these stakes is over $174.3 million. With roughly 1 million shares, Citadel Investment Group was the company’s leading stakeholder in Q2.
11. Leggett & Platt, Incorporated (NYSE:LEG)
P/E Ratio as of November 11: 14.67
Dividend Yield as of November 11: 7.99%
Leggett & Platt, Incorporated (NYSE:LEG) is a Missouri-based manufacturer that designs and produces a wide range of engineered components and products for various industries. The company announced a quarterly dividend of $0.46 per share, which was in line with its previous dividend. Overall, it has raised its payouts for 52 years in a row. The stock’s dividend yield on November 11 came in at 7.99%.
The number of hedge funds tracked by Insider Monkey owning stakes in Leggett & Platt, Incorporated (NYSE:LEG) grew to 18 in Q2 2023, from 11 in the previous quarter. The collective value of these stakes is more than $68.4 million.
10. Delek Logistics Partners, LP (NYSE:DKL)
P/E Ratio as of November 11: 14.43
Dividend Yield as of November 11: 8.60%
Delek Logistics Partners, LP (NYSE:DKL) is a master limited partnership (MLP) that is involved in the gathering and transportation of crude oil from production areas to refineries or storage facilities. The company’s cash position remained strong in the third quarter of 2023, with its operating cash flow coming in at $$46.8 million. Its distributable cash flow for the period amounted to over $61.4 million.
Delek Logistics Partners, LP (NYSE:DKL), one of the best dividend stocks on our list, has raised its dividends for 43 years in a row. The company pays a quarterly dividend of $1.045 per share and has a dividend yield of 8.60%, as of November 11.
As of the close of Q2 2023, Citadel Investment Group was the only stakeholder of Delek Logistics Partners, LP (NYSE:DKL), owning stakes worth $328,000.
9. Highwoods Properties, Inc. (NYSE:HIW)
P/E Ratio as of November 11: 13.95
Dividend Yield as of November 11: 11.12%
Highwoods Properties, Inc. (NYSE:HIW) is an American real estate investment trust that primarily focuses on the development, acquisition, leasing, and management of office properties. The company has been making regular dividend payments to shareholders since 1994. It offers a quarterly dividend of $0.50 per share for a dividend yield of 11.12%, as recorded on November 11.
In the third quarter of 2023, Highwoods Properties, Inc. (NYSE:HIW) posted revenue of $207.1 million, which was in line with its revenue from the same period last year. The company ended the quarter with roughly $17 million available in cash and cash equivalents.
As of the close of Q2 2023, 20 hedge funds in Insider Monkey’s database owned stakes in Highwoods Properties, Inc. (NYSE:HIW), the same as in the previous quarter. The consolidated value of these stakes is nearly $166 million. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q2.
8. Energy Transfer LP (NYSE:ET)
P/E Ratio as of November 11: 12.40
Dividend Yield as of November 11: 9.51%
Energy Transfer LP (NYSE:ET) is an American company that is involved in the midstream energy sector. The company is also engaged in the transportation, storage, and distribution of energy resources, including natural gas, crude oil, and natural gas liquids (NGLs).
On October 20, Energy Transfer LP (NYSE:ET) declared a 0.8% hike to its quarterly dividend to $0.3125 per share. This marked the company’s eighth consecutive quarter of dividend growth, which makes it one of the best dividend stocks on our list. The stock’s dividend yield on November 11 came in at 9.51%.
As of the end of Q2 2023, 34 hedge funds in Insider Monkey’s database reported having stakes in Energy Transfer LP (NYSE:ET), compared with 35 in the previous quarter. The collective value of these stakes is more than $606.3 million.
7. Barings BDC, Inc. (NYSE:BBDC)
P/E Ratio as of November 11: 10.77
Dividend Yield as of November 11: 11.83%
Barings BDC, Inc. (NYSE:BBDC) is a business development company that focuses on providing capital and financial solutions to middle-market companies. The company recently announced its third-quarter earnings and posted a total investment income of $70.8 million, which showed a 25.8% growth from the same period last year. In the first nine months of the year, the company returned $81.3 million to shareholders through dividends.
Barings BDC, Inc. (NYSE:BBDC), one of the best dividend stocks on our list, has raised its dividends multiple times since 2018. The company offers a quarterly dividend of $0.26 per share and has a dividend yield of 11.83%, as of November 11.
According to Insider Monkey’s database of Q2 2023, 12 hedge funds owned investments in Barings BDC, Inc. (NYSE:BBDC), up from 11 in the previous quarter. The collective value of these stakes is over $38.6 million. With over 2.4 million shares, Callodine Capital Management was the company’s leading stakeholder in Q2.
6. KeyCorp (NYSE:KEY)
P/E Ratio as of November 11: 8.90
Dividend Yield as of November 11: 7.49%
KeyCorp (NYSE:KEY) is a bank holding company that operates as a financial services company. It provides a range of banking and financial services to individuals, small and medium-sized businesses, and corporate clients. The company offers a quarterly dividend of $0.205 per share and has a dividend yield of 7.49%, as of November 11. It is one of the best dividend stocks on our list as the company has been raising its dividends for 12 consecutive years.
Broadcom Inc. (NASDAQ:AVGO), International Business Machines Corporation (NYSE:IBM), and Verizon Communications Inc. (NYSE:VZ) are some other popular dividend stocks to consider with high yields.
KeyCorp (NYSE:KEY) was a popular buy among hedge funds as of Q2 2023, as 49 funds in Insider Monkey’s database owned stakes in the company, up from 34 in the preceding quarter. These stakes are collectively valued at over $334 million.
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Disclosure. None. 12 Cheap High Dividend Stocks To Buy Right Now is originally published on Insider Monkey.