In this article, we will take a look at the 10 Best Affordable Dividend Stocks to Buy. To skip our analysis of the recent market trends, and dividend stocks, you can go directly to see the 5 Best Affordable Dividend Stocks to Buy.
Dividend stocks are the shares of publicly listed companies that regularly distribute a portion of the company’s earnings to the shareholders. High-quality dividend stocks have a long history of regular dividend payments to their shareholders with the top-tier dividend stocks increasing their dividend payouts over time, allowing the shareholders to build a regular cash stream.
Individuals can invest in dividend stocks directly, by adding individual dividend stocks to their portfolio, or through investments in mutual funds and Exchange Traded Funds (ETFs). There are multiple ETFs that provide access to investments in high-yield dividend companies, such as the Vanguard High Dividend Yield ETF with dividend yield of 2.7%.
Global markets have been going through a rough patch with fears of a potential economic recession due to inflation and tighter monetary policies implemented by central banks.
If economic data continues to miss expectations, stocks could continue to decline. Given the uncertainty, it could be a good idea to own a diversified portfolio across different stocks and sectors. There could also be an opportunity for long term investors to buy quality blue chip stocks.
Methodology
For our list of 10 Best Affordable Dividend Stocks to Buy, we took 10 stocks that had a dividend yield of over 1% and that were substantially below the average analyst price target. To find affordable stocks, we picked only stocks trading below $25 per share as of September 27. We then used the collective wisdom of hedge funds and ranked the stocks based on the number of hedge funds in our database that held shares in the same stocks at the end of Q2 2022.
10 Best Affordable Dividend Stocks to Buy
10. Credit Suisse Group AG (NYSE:CS)
Stock Price as of September 27: $3.98
Dividend Yield as of September 27: 2.54%
Number of Hedge Fund Holders: 9
Zurich-based Credit Suisse Group AG (NYSE:CS) is a leading financial services provider with a focus on wealth management, investment banking, and asset management services. With a history dating back to 1856, the financial services provider has a global reach extending to 50 countries worldwide and had CHF 1.6 trillion in assets under management, as of end 2021.
Given the uncertain markets, Credit Suisse Group AG (NYSE:CS) shares have declined by 58.40% year to date as of September 27. Analysts, nevertheless think there could be upside in the banking stock with the average analyst price target of $6.24 per share.
As of Q2 2022, 9 out of the 895 hedge funds tracked by Insider Monkey were bullish on Credit Suisse Group AG (NYSE:CS) and held its shares valued at $13 million. Two Sigma Advisors was the largest shareholder holding 1.3 million shares valued at $7 million.
Alongside Healthpeak Properties, Inc. (NYSE:PEAK), Warner Music Group Corp. (NASDAQ:WMG), and Albertsons Companies, Inc. (NYSE:ACI), Credit Suisse Group AG (NYSE:CS) is an affordable dividend stock owned by many hedge funds in our database at the end of Q2 2022.
9. Barclays PLC (NASDAQ:BCS)
Stock Price as of September 27: $6.72
Dividend Yield as of September 27: 6.31%
Number of Hedge Fund Holders: 13
Barclays PLC (NASDAQ:BCS) is a London-based universal bank providing financial services across consumer banking and payments operations around the world, as well as global corporate and investment banking. Its history dates back to more than 325 years ago and currently operates in more than 40 countries worldwide.
Similar to several other financial industry stocks, Barclays PLC (NASDAQ:BCS) shares have lost significant value since the beginning of the year and have registered a 35.07% year-to-date decline as of September 27. Its current valuation offers an upside potential of 37% based on the average analyst price target of $9.19 for its ADRs.
As of Q2 2022, Barclays PLC (NASDAQ:BCS) shares were held by 13 of the 895 hedge funds tracked by Insider Monkey, valued at $152 million. Arrowstreet Capital was its biggest shareholder with ownership of 10.8 million shares valued at $82 million.
8. Deutsche Bank AG (NYSE:DB)
Stock Price as of September 27: $7.73
Dividend Yield as of September 27: 2.73%
Number of Hedge Fund Holders: 16
Frankfurt-based Deutsche Bank AG (NYSE:DB) provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments, and institutional investors.
As of September 27, Deutsche Bank AG (NYSE:DB) shares have lost 38.16% of its value since the beginning of the year and trade at a forward P/E ratio of 4.37. Despite the significant drop in its valuations, analysts have an average price target of $11.43 per share.
As of Q2 2022, 16 of the 895 hedge funds tracked by Insider Monkey owned shares of Deutsche Bank AG (NYSE:DB), valued at $935 million. Its largest shareholder was Hudson Executive Capital with ownership of 67.4 million shares valued at $587 million.
7. Hewlett Packard Enterprise Company (NYSE:HPE)
Stock Price as of September 27: $12.04
Dividend Yield as of September 27: 3.99%
Number of Hedge Fund Holders: 37
Hewlett Packard Enterprise Company (NYSE:HPE), based in Houston, Texas, is an edge-to-cloud company offering intelligent technology solutions as a service – spanning Cloud Services, Compute, High Performance Computing & AI, Intelligent Edge, Software, and Storage.
The board of Directors of Hewlett Packard Enterprise Company (NYSE:HPE) declared a regular quarterly cash dividend of $0.12 per common share in August.
As of September 27, Hewlett Packard Enterprise Company (NYSE:HPE) shares were down 23.65% year-to-date with the forward P/E ratio currently at 5.69. Analysts have an average price target of $16.29.
On August 31, Deutsche Bank analyst Sidney Ho lowered the price target on Hewlett Packard Enterprise Company (NYSE:HPE) shares to $15 from $16 and maintained a ‘Hold’ rating on the shares.
As of Q2 2022, 37 of the 895 hedge funds tracked by Insider Monkey were long Hewlett Packard Enterprise Company (NYSE:HPE), holding shares worth $709 million. Its largest hedge fund shareholder is Pzena Investment Management with ownership of 32 million shares valued at $425 million.
6. KeyCorp (NYSE:KEY)
Stock Price as of September 27: $15.96
Dividend Yield as of September 27: 4.89%
Number of Hedge Fund Holders: 37
Based in Cleveland, Ohio, KeyCorp (NYSE:KEY) is a full-service commercial, corporate, and investment bank focused primarily on serving middle market clients within targeted industry sectors. It also provides services across commercial mortgage finance and servicing, equipment finance, public finance, and commercial payments.
The shares of banking and financial services companies have underperformed this year driven by fears of a recession. KeyCorp (NYSE:KEY) has been no exception as its shares have lost 31% of their value year-to-date, as of September 27, and trade at a forward P/E ratio of 6.71. Despite the downturn, analysts hold an average price target of $22.10 for its shares.
As of Q2 2022, 37 hedge funds tracked by Insider Monkey held shares of KeyCorp (NYSE:KEY), worth $338 million. Adage Capital Management is its largest hedge fund shareholder with ownership of 4.5 million shares valued at $77 million.
Like KeyCorp (NYSE:KEY), Healthpeak Properties, Inc. (NYSE:PEAK), Warner Music Group Corp. (NASDAQ:WMG), and Albertsons Companies, Inc. (NYSE:ACI) are affordable dividend stocks that are widely owned by many hedge funds in our database at the end of Q2 2022.
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Disclosure: None. 10 Best Affordable Dividend Stocks to Buy is originally published on Insider Monkey.
