5 Best Dividend Stocks Under $20

2 – Kinder Morgan, Inc. (NYSE:KMI)

Kinder Morgan provides energy transportation and storage services to its customers, and with its 83,000 miles of pipelines and 147 terminals. It is the largest energy infrastructure firm in the S&P500 Index. Before the collapse of oil prices in March, KMI was trading around $21 and at its trough the shares sank slightly below $9. Considering the closing price of $14.30 on Thursday, we can say that it has an upside potential of 50% if it can reclaim its February highs.

Although the energy sector had tough challenges this year, KMI has managed to increase its dividend and declared an annual $1.05 dividend per share to its shareholders. This corresponds to a 7.34 percent dividend yield and this figure is the highest yield in our list. The company was popular among hedge funds and there were 46 hedge funds with bullish KMI positions at the end of September. FPR Partners stands at the top of the list with its $222 million worth of shares. First Pacific Advisors LLC follows it with $186 million interest in the shares. Although the sentiment for the KMI shares is in a declining mode among the hedge fund managers, there are still many who believe in the upside potential of the company.

After a detailed reading of its earnings release following remarks from the KMI President Kim Dang are worth considering: “Despite the on-going headwinds facing the energy sector overall, including continued low crude oil and natural gas production and reduced demand for refined products, we generated third quarter earnings” In addition to that KMI’s this statement is also striking: “We generate substantial cash and we remain committed to funding our capital needs internally, maintaining a healthy balance sheet and returning excess cash to our shareholders through dividend increases and/or share repurchases.”