13 Cheap DRIP Stocks To Buy Now

Published on January 27, 2023 at 9:51 am by Vardah Gill in Dividend Stocks, Hedge Funds, News

In this article, we discuss 13 cheap DRIP stocks to buy. You can skip our detailed analysis of dividend reinvestments and returns of dividend stocks over the years, and go directly to read 5 Cheap DRIP Stocks To Buy Now.

Dividend reinvestment plans, or DRIPs, allow investors to reinvest their dividend payouts into the company’s additional shares. Through this investment strategy, shareholders can gain long-term benefits because of the power of compounding. Many popular dividend companies like The Procter & Gamble Company (NYSE:PG), Bank of America Corporation (NYSE:BAC), and Johnson & Johnson (NYSE:JNJ) offer DRIP policies to investors without any additional charges.

Rising inflation and lingering threats of a possible recession have brought forward the importance of dividend stocks. Historically, dividends have shown strong performance in high-interest rates periods. Morningstar’s November report also mentioned that dividend stocks outperformed the broader market during the Great Inflation decade of the 1970s. Readers can also check out 14 Best Stocks To Buy Before A Recession to explore other investment options during these uncertain times.

According to a report by Hartford Funds, reinvested dividends represented 84% of the total return of the S&P 500 since 1960. The report also mentioned that companies that have raised their dividends for a certain period returned more than those that showed no change in their dividends or slashed their payouts. Dividend growers and initiators delivered an annual average return of 10.68% from 1973 to 2021, compared with a 4.79% return of non-dividend payers during the same period.

Another report by Welch & Forbes LLC also highlighted the long-term benefits of reinvested dividends. The report calculated that an investment of $1,000 in the S&P 500 from 1928 to 2021 would have resulted in final portfolio value of $380,250. However, the final portfolio’s worth would reach over $7 million with dividends reinvested.

Photo by Karolina Grabowska: https://www.pexels.com/photo/hands-holding-us-dollar-bills-4968630/

Our Methodology:

For this article we first used stock screeners to find dividend stocks with P/E ratios of less than 20 and share prices below $100, as of January 25. As expected the resultant list was huge. We then picked 13 stocks from the results that offer dividend reinvestment plans and have the lowest PE ratios. The stocks are ranked in descending order of their P/E ratios.

13. A. O. Smith Corporation (NYSE:AOS)

P/E Ratio as of January 25: 19.26

Share Price as of January 25: $60.52

A. O. Smith Corporation (NYSE:AOS) is an American manufacturing company that markets both residential and commercial water heaters and boilers. The company’s DRIP policy allows investors to reinvest and sell their shares directly through the plan. It is among the cheap DRIP stocks to buy on our list.

On January 18, A. O. Smith Corporation (NYSE:AOS) declared a quarterly dividend of $0.30 per share, which fell in line with its previous dividend. The company has been raising its dividends consistently for the past 29 years. As of January 25, the stock has a dividend yield of 1.98%. It can be added to dividend portfolios alongside other dividend stocks such as The Procter & Gamble Company (NYSE:PG), Bank of America Corporation (NYSE:BAC), and Johnson & Johnson (NYSE:JNJ).

In December, Citigroup presented a positive outlook on A. O. Smith Corporation’s (NYSE:AOS) future performance and raised its price target on the stock to $61 with a Neutral rating.

As of January 25, the stock has a P/E ratio of 19.26 with a $60.52 share price.

At the end of Q3 2022, 29 hedge funds tracked by Insider Monkey reported owning stakes in A. O. Smith Corporation (NYSE:AOS), worth $370.8 million. Impax Asset Management was the company’s leading stakeholder in Q3.

LRT Capital Management mentioned A. O. Smith Corporation (NYSE:AOS) in its Q2 2022 investor letter. Here is what the firm has to say:

“A.O. Smith is the largest US manufacturer of residential and commercial water heaters, boilers and water treatment products. The company generates close to $3 billion in annual sales. The majority of the company’s business (73%) is done in North America, with the balance coming from China and India. Approximately 80% of demand is replacing existing heaters and 20% is tied to new construction. The company continues to benefit from a shift towards higher efficiency, but more expensive, tankless heaters.

A.O. Smith generates returns on invested capital in the high teens. The company uses its earnings to consistently grow its dividends and share repurchases. Over the past three years the company’s performance has been hurt by its exposure to China as its business there suffered due to the US-China trade war and poor execution. We believe the China business is back on track and the all-important US business is doing better than ever as housing demand heats up in the US. The company beat earnings estimates over the past several quarters and is currently enjoying very good performance as the hot U.S housing market continues to be strong.¹⁹ A.O. Smith also recently increased its share repurchase authorization.”

12. Altria Group, Inc. (NYSE:MO)

P/E Ratio as of January 25: 17.41

Share Price as of January 25: $44.9

Altria Group, Inc. (NYSE:MO) is one of the world’s largest producers of tobacco and related products, based in Virginia. The company currently pays a quarterly dividend of $0.94 per share with a dividend yield of 8.37%, as of January 25. It has raised its dividends for 53 years in a row.

Altria Group, Inc. (NYSE:MO) offers a dividend reinvestment plan to shareholders with the option of purchasing additional shares of the company. As of January 25, the stock is trading at $44.9 per share and has a price-to-earnings ratio of 17.41.

In the third quarter of 2022, Altria Group, Inc. (NYSE:MO) reported revenue of $5.41 billion, which fell by 2.2% from the same period last year. The company distributed $1.6 billion to shareholders in dividends and nearly $5 billion in the first nine months of 2022.

At the end of Q3 2022, 47 hedge funds tracked by Insider Monkey reported owning stakes in Altria Group, Inc. (NYSE:MO), down from 48 in the previous quarter. The consolidated value of these stakes is over $1.5 billion.

11. Emerson Electric Co. (NYSE:EMR)

P/E Ratio as of January 25: 16.51

Share Price as of January 25: $89.08

Emerson Electric Co. (NYSE:EMR) is an American manufacturer of industrial, commercial, and consumer products. The company offers a convenient and low-cost dividend reinvestment policy to shareholders, which places it as one of the cheap DRIP stocks to buy now.

Emerson Electric Co. (NYSE:EMR) pays a quarterly dividend of $0.52 per share, having raised it by 1% in November. The company has been raising its dividends consistently for the past 66 years. The stock’s dividend yield on January 25 came in at 2.33%.

In December, Citigroup lifted its price target on Emerson Electric Co. (NYSE:EMR) to $109 with a Buy rating on the shares. The firm mentioned that the company could benefit from gradually improving supply chains.

In fiscal Q4 2022, Emerson Electric Co. (NYSE:EMR) reported a strong cash position, with an operating cash flow of $1.2 billion and a free cash flow of $1 billion. For FY23, the company expects to pay nearly $1.2 billion in dividends to shareholders. As of January 25, the stock is trading at a share price of $89.08 with a P/E ratio of 16.51.

At the end of September 2022, 48 hedge funds in Insider Monkey’s database owned stakes in Emerson Electric Co. (NYSE:EMR), up from 47 in the previous quarter. The collective value of these stakes is over $1.15 billion. D E Shaw owned the largest stake in the company in Q3.

10. Franklin Resources, Inc. (NYSE:BEN)

P/E Ratio as of January 25: 11.93

Share Price as of January 25: $30.19

Franklin Resources, Inc. (NYSE:BEN) is a California-based multinational holding company. The company is among the cheap DRIP stocks on our list as it has a P/E ratio of 11.93 and is trading at $30.19 per share, as of January 25.

Franklin Resources, Inc. (NYSE:BEN) remained committed to its shareholder obligation, returning $773 million to stakeholders in dividends during FY21. The company pays a quarterly dividend of $0.30 per share and has a dividend yield of 3.97%, as of January 25. It maintains a 43-year streak of consistent dividend growth.

Along with a direct investment plan, Franklin Resources, Inc. (NYSE:BEN) also offers a DRIP policy to shareholders, which allows them to purchase additional shares of the company by investing all or a portion of their cash dividends.

At the end of September, 25 hedge funds in Insider Monkey’s database owned stakes in Franklin Resources, Inc. (NYSE:BEN), up from 24 in the previous quarter. These stakes have a collective value of nearly $126 million.

9. Enterprise Products Partners L.P. (NYSE:EPD)

P/E Ratio as of January 25: 11.33

Share Price as of January 25: $26.18

Enterprise Products Partners L.P. (NYSE:EPD) is a Texas-based natural and crude oil pipeline company that also provides energy services to its consumers. In January, Wolfe Research upgraded the stock to Outperform with a $27 price target, appreciating the company’s balance sheet and strong dividend yield.

Enterprise Products Partners L.P. (NYSE:EPD) announced its DRIP policy in 2003. The reinvestment plan is simple which allows the investors no-cost means of investing in the company’s common shares. As of January 25, the stock is trading at a PE multiple of 11x with a $26.18 share price.

Enterprise Products Partners L.P. (NYSE:EPD) pays a quarterly dividend of $0.49 per share, having raised it by 3.2% in January. Through this increase, the company stretched its dividend growth streak to 23 years. The stock has a dividend yield of 7.49%, as of January 25.

At the end of Q3 2022, 21 hedge funds tracked by Insider Monkey owned stakes in Enterprise Products Partners L.P. (NYSE:EPD), compared with 23 in the previous quarter. The collective worth of these stakes is over $221.6 million. With roughly 4 million shares, Fairholme (FAIRX) was the company’s largest stakeholder in Q3.

Fairholme Capital Management mentioned Enterprise Products Partners L.P. (NYSE:EPD) in its Q2 2022 investor letter. Here is what the firm has to say:

“Enterprise Products Partners L.P. (NYSE:EPD) is the largest position in the Fund. Enterprise provides processing and transportation services to producers and consumers of natural gas, natural gas liquids, and oil. These hydrocarbons are critical for modern life and have few if any, ready substitutes. Commodity prices do not greatly affect the company’s toll road fees. Enterprise is priced at less than nine times distributable cash flows and pays a 7.5% cash distribution.”

8. Truist Financial Corporation (NYSE:TFC)

P/E Ratio as of January 25: 11.01

Share Price as of January 25: $48.7

Truist Financial Corporation (NYSE:TFC) is a North Carolina-based bank holding company that provides accounts, credit cards, and commercial banking services to its consumers. On January 24, the company declared a quarterly dividend of $0.52 per share, consistent with its previous dividend. It has raised its dividends for two years in a row. The stock’s dividend yield on January 25 came in at 4.26%.

In January, Jefferies upgraded Truist Financial Corporation (NYSE:TFC) to Buy with a $52 price target, highlighting the company’s revenue and its overall performance.

Truist Financial Corporation (NYSE:TFC) has a share price of $48.7 with a PE ratio of 11.01, which makes it one of the cheap DRIP stocks on our list.

At the end of September, 39 hedge funds tracked by Insider Monkey reported owning stakes in Truist Financial Corporation (NYSE:TFC), up from 33 in the previous quarter. The collective value of these stakes is over $570.2 million.

7. Bank of America Corporation (NYSE:BAC)

P/E Ratio as of January 25: 10.85

Share Price as of January 25: $34.8

Another cheap DRIP stock on our list is Bank of America Corporation (NYSE:BAC), which is an American financial services company. The company holds a nine-year track record of consistent dividend growth. It currently pays a quarterly dividend of $0.22 per share for a dividend yield of 2.52%, as of January 25.

In the fourth quarter of 2022, Bank of America Corporation (NYSE:BAC) reported revenue of $24.5 billion, which showed an 11.2% growth from the same period last year. The company’s net interest income also jumped by 29% to $14.7 billion.

Following the company’s recent quarterly earnings, Citigroup raised its price target on Bank of America Corporation (NYSE:BAC) in January to $38 with a Buy rating on the shares. The stock is trading at a share price of $34.8 and has a price-to-earnings ratio of 10.85.

Berkshire Hathaway owned the largest stake in Bank of America Corporation (NYSE:BAC) in Q3 2022, worth $30.5 billion. Overall, 97 hedge funds tracked by Insider Monkey reported owning stakes in the company, with a collective value of $35.6 billion.

Ariel Investments mentioned Bank of America Corporation (NYSE:BAC) in its third-quarter 2022 investor letter. Here is what the firm has to say:

“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”

6. National Fuel Gas Company (NYSE:NFG)

P/E Ratio as of January 25: 9.40

Share Price as of January 25: $57.7

National Fuel Gas Company (NYSE:NFG) is an American diversified energy company, based in New York. The company mainly specializes in the distribution of energy resources. Its DRIP policy allows shareholders to reinvest their dividends without any broker. The company is among the cheap DRIP stocks on our list.

National Fuel Gas Company (NYSE:NFG) has rewarded shareholders with 120 years of consistent dividend payments while maintaining a 52-year streak of dividend growth. The company pays a quarterly dividend of $0.475 per share for a dividend yield of 3.29%, as of January 25. Due to its consistent dividend growth, it is a great investment option alongside The Procter & Gamble Company (NYSE:PG), Bank of America Corporation (NYSE:BAC), and Johnson & Johnson (NYSE:JNJ).

As of the close of January 25, National Fuel Gas Company (NYSE:NFG) has a share price of $57.7 with a price-to-earnings ratio of 9.40.

At the end of September 2022, 29 hedge funds in Insider Monkey’s database reported owning stakes in National Fuel Gas Company (NYSE:NFG), up from 23 in the preceding quarter. The collective value of these stakes is roughly $219 million. Among these hedge funds, GAMCO Investors was the company’s leading stakeholder in Q3.

Click to continue reading and see 5 Cheap DRIP Stocks To Buy Now.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on May 1, 2024 at by Inan Dogan, PhD

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

The whispers are turning into roars.

Artificial intelligence isn’t science fiction anymore.

It’s the revolution reshaping every industry on the planet.

From driverless cars to medical breakthroughs, AI is on the cusp of a global explosion, and savvy investors stand to reap the rewards.

Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 10,000% Return: This AI Stock is a Diamond in the Rough (But Our Help is Key!)

The AI revolution is upon us, and savvy investors stand to make a fortune.

But with so many choices, how do you find the hidden gem – the company poised for explosive growth?

That’s where our expertise comes in.

We’ve got the answer, but there’s a twist…

Imagine an AI company so groundbreaking, so far ahead of the curve, that even if its stock price quadrupled today, it would still be considered ridiculously cheap.

That’s the potential you’re looking at. This isn’t just about a decent return – we’re talking about a 10,000% gain over the next decade!

Our research team has identified a hidden gem – an AI company with cutting-edge technology, massive potential, and a current stock price that screams opportunity.

This company boasts the most advanced technology in the AI sector, putting them leagues ahead of competitors.

It’s like having a race car on a go-kart track.

They have a strong possibility of cornering entire markets, becoming the undisputed leader in their field.

Here’s the catch (it’s a good one): To uncover this sleeping giant, you’ll need our exclusive intel.

We want to make sure none of our valued readers miss out on this groundbreaking opportunity!

That’s why we’re slashing the price of our Premium Readership Newsletter by a whopping 75%.

For a ridiculously low price of just $24, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single restaurant meal!

Here’s why this is a deal you can’t afford to pass up:

The Name of the Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.
Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.
Lifetime Money-Back Guarantee: If you’re not absolutely satisfied with our service, we’ll provide a full refund ANYTIME, no questions asked.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

Head over to our website and subscribe to our Premium Readership Newsletter for just $24.
Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.
Sit back, relax, and know that you’re backed by our ironclad lifetime money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

Subscribe Now!

A New Dawn is Coming to U.S. Stocks

Published on May 2, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…

Insider Monkey Ads

Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Log In

Sign Up