In this article, we will take a look at the 5 Dividend Stocks With Low Payout Ratios and Strong Upside Potential. For deeper discussion and analysis, read 10 Dividend Stocks With Low Payout Ratios and Strong Upside Potential.
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5. The Andersons, Inc. (NASDAQ:ANDE)
Upside Potential as of June 24: 29.74%
5-Year Average Payout Ratio: 26.40%
On June 18, Texas Capital initiated coverage of The Andersons, Inc. (NASDAQ:ANDE) with a Buy rating. It set a $110 price target on the stock. The analyst said the company offers “differentiated exposure” to the U.S. ethanol and renewable feedstocks industries through its vertically integrated business model. In a research note, the firm added that Andersons is well-positioned to benefit from an “increasingly constructive” macro environment for ethanol.
During the company’s first-quarter 2026 earnings call, CEO, President, and Director William Krueger said the quarter marked a major milestone with the finalization of the largest-ever renewable volume obligations for 2026 and 2027.
Krueger also said construction at the company’s Port of Houston facility was progressing as planned, with full operations expected to begin in the third quarter. He added that the Carlsbad Mineral plant had become operational, while upgrades to increase clean corn capacity at the company’s Mansfield, Illinois, facility were underway.
Executive Vice President and CFO Brian Valentine reported that The Andersons generated net income attributable to the company of $33 million, or $0.97 per diluted share, in the first quarter of 2026. Adjusted net income totaled $38 million, or $1.12 per diluted share.
Valentine also said the company had qualified for the next tier of 45Z tax credits in 2026, as expected, and recognized $26 million of those credits during the first quarter.
The Andersons, Inc. (NASDAQ:ANDE) is a diversified company with Agribusiness and Renewables as its two operating segments. The Agribusiness segment includes commodity merchandising, terminal grain elevator operations, and the manufacturing and distribution of plant nutrient products.
4. Baker Hughes Company (NASDAQ:BKR)
Upside Potential as of June 24: 33.03%
5-Year Average Payout Ratio: 44.02%
On June 24, Reuters reported that Baker Hughes Company (NASDAQ:BKR) signed an agreement with geothermal developer Mantle Reach Power. The deal is to deliver up to 500 megawatts of geothermal capacity in North America. The companies said the deal comes as rising electricity demand from data centers and artificial intelligence is increasing interest in reliable, around-the-clock power sources such as geothermal energy.
Under the agreement, Baker Hughes will serve as the integrated subsurface solutions provider. In addition, Mantle Reach Power will lead project development, ownership, and financing. The companies said the collaboration targets up to 500 megawatts of power over the next five years. The phased agreement covers the development, construction, and operation of geothermal projects.
Mantle Reach Power is backed by EnCap Energy Transition Fund III, part of EnCap Investments, which the companies said has raised about $47 billion across 25 institutional funds.
Baker Hughes Company (NASDAQ:BKR) is an energy technology company that provides solutions to energy and industrial customers worldwide.
3. Cheniere Energy, Inc. (NYSE:LNG)
Upside Potential as of June 24: 33.18%
5-Year Average Payout Ratio: 17.03%
On June 17, Bernstein initiated coverage of Cheniere Energy, Inc. (NYSE:LNG)with an Outperform rating. It also set a $283 price target on the stock. The firm said Cheniere has 95% of its portfolio tied to long-duration contracts. It also expects the company’s brownfield capital spending to support high-return expansion projects, giving the business a relatively low-risk profile.
Earlier, on June 3, JPMorgan raised its price recommendation on LNG to $327 from $325. It reiterated an Overweight rating. The firm believes the recent weakness in the stock presents a long-term buying opportunity.
Cheniere Energy, Inc. (NYSE:LNG) is a producer and exporter of liquefied natural gas (LNG) in the United States. The company supplies clean and secure LNG to integrated energy companies, utilities, and energy trading companies around the world.
2. Jack Henry & Associates, Inc. (NASDAQ:JKHY)
Upside Potential as of June 24: 45.13%
5-Year Average Payout Ratio: 39.04%
On June 18, RBC Capital lowered its price recommendation on Jack Henry & Associates, Inc. (NASDAQ:JKHY) to $173 from $180. It reiterated an Outperform rating on the stock. The firm said its bullish thesis from the December upgrade has continued to play out. Year to date, the company has secured 43 new core deals, up from 28 during the same period last year. RBC also pointed out that these wins have come from larger financial institutions and carry higher contract values. Even so, the firm believes the shares have become “more dislocated than before” and reduced its price target to reflect the continued re-rating across the fintech sector.
During the fiscal third-quarter 2026 earnings call, CEO, President & Director Gregory Adelson said the company delivered record third-quarter results. Non-GAAP revenue reached $616 million, up 7.3% from the same quarter a year earlier.
Adelson said the sales and marketing team had an outstanding quarter, winning 17 competitive core deals, including five financial institutions with more than $1 billion in assets. Based on the company’s strong momentum, he said management was highly confident it would exceed the 51 core wins recorded in the previous year.
He also said that by the end of April, more than 700 banks and credit unions were live with Tap2Local. Since the company began targeted marketing just a few days earlier, the number of active merchants had doubled to more than 1,600, with several thousand more merchants already in the enrollment process.
Jack Henry & Associates, Inc. (NASDAQ:JKHY) is a financial technology company. Its business operates through the Core, Payments, Complementary, and Corporate and Other segments.
1. Albemarle Corporation (NYSE:ALB)
Upside Potential as of June 24: 47.38%
5-Year Average Payout Ratio: 59.23%
On June 18, Citi upgraded Albemarle Corporation (NYSE:ALB) to Buy from Neutral. It kept its price target unchanged at $225. Analyst Patrick Cunningham said the company is well-positioned to benefit from “structural lithium demand tailwinds.” He added that the market is not fully recognizing Albemarle’s long-term growth potential at current share prices. Citi also remains skeptical that the lithium market will “flip to a meaningful glut.”
Earlier, on May 26, RBC Capital raised its price recommendation on Albemarle to $257 from $253. It reiterated an Outperform rating on the stock. The firm expects the company to grow production volumes at a mid-single-digit compound annual growth rate over the next several years. RBC said this growth should be driven mainly by brownfield expansions at CGP3 and Wodgina, productivity gains at Atacama, and additional opportunities at Kings Mountain and Antofalla. The firm also viewed last month’s 9% decline in the stock, driven by oil prices and broader market factors, as a buying opportunity.
Albemarle Corporation (NYSE:ALB) transforms essential resources into critical ingredients for mobility, energy, connectivity, and health. The company operates through its Energy Storage, Specialties, and Ketjen segments.
While we acknowledge the potential of ALB to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ALB and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: Top 10 Blue Chip Stocks with Growing Dividends and 10 Reliable Dividend Stocks to Buy for Long-Term Investors.
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