In this article, we discuss the 11 best dividend-paying stocks under $20. You can skip our detailed analysis of the dividend-paying stocks, and go directly to read the 5 best dividend-paying stocks under $20.
Dividend-paying stocks are often favored by investors due to their ability to generate a regular stream of income for them. According to a report published by Hartford Funds, dividend income has an average contribution of 41% to the total return of the S&P 500 from 1930 to 2020. Moreover, 84% of the S&P 500 returns can be attributed to dividend income since 1970.
In 2020, many companies eliminated their dividends due to the pandemic as they fell by $382.2 billion in the second quarter of 2020, reported by Financial Times. However, as economies around the world begin to reopen, the stock market is witnessing a dividend boost as 84% of the companies have increased their dividends after the pandemic.
According to a report published by CNBC, dividend payments are expected to hit $1.4 trillion in 2021, jumping 26% in Q2 at $471.7 billion, compared with the same time in 2020. Moreover, the DVY iShares dividend ETF, which lists some of the high-yielding stocks, gained 39.6% in the past year. This can be attributed to the fact that investors are now investing their money into ETFs listing stocks with high dividends. As Wall Street Journal noted, 143 U.S. dividend ETFs have assets of over $281 billion as they are gaining more attention than individual stocks.
Some of the notable stocks that pay dividends include The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), Exxon Mobil Corporation (NYSE:XOM), Lowe’s Companies, Inc. (NYSE:LOW), and Johnson & Johnson (NYSE:JNJ). These companies have been paying dividends for relatively long periods of time and growing their dividends for over 50 years. However, in this list, we will focus on dividend stocks under $20.
Our Methodology:
Let’s analyze our list of the best dividend-paying stocks under $20. The companies mentioned below are the stocks trading below $20. In addition to this, we took into account the stocks’ dividend yields, hedge fund sentiments, analysts’ ratings, long-term growth potential, and fundamentals while choosing these stocks.
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Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by wide margins. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
11 best dividend paying stocks under $20
11. Investors Bancorp, Inc. (NASDAQ:ISBC)
Number of Hedge Fund Holders: 15
Dividend Yield: 3.6%
Share Price as of October 20: $15.75
Investors Bancorp, Inc. (NASDAQ:ISBC) stands eleventh on our list of the best dividend-paying stocks under $20. It is an American bank and a holding company, which provides financial services to its consumers.
Recently, Investors Bancorp, Inc. (NASDAQ:ISBC) received a green signal from the Federal Deposit Insurance Company (FDIC) on its acquisition of eight Berkshire branches in New Jersey and Pennsylvania. In Q2 2021, Investors Bancorp, Inc. (NASDAQ:ISBC) posted revenue of $207.7 million, up 8.1% from the prior-year quarter.
This July, Stephens upgraded Investors Bancorp, Inc. (NASDAQ:ISBC) to ‘Overweight’, while lifting its price target to $17.5. In the past year, Investors Bancorp, Inc. (NASDAQ:ISBC) delivered a 99.2% return to shareholders. The company pays an annual dividend of $0.56 per share, yielding 3.6%.
As of Q2 2021, 15 hedge funds tracked by Insider Monkey have positions in Investors Bancorp, Inc. (NASDAQ:ISBC), up from 12 in the previous quarter. The total value of these stakes is $53.9 million.
10. First Horizon Corporation (NYSE:FHN)
Number of Hedge Fund Holders: 27
Dividend Yield: 3.63%
Share Price as of October 20: $17.02
First Horizon Corporation (NYSE:FHN) stands tenth on our list of the best dividend-paying stocks under $20. It is an American bank holding company that provides financial services to its consumers.
Recently, Raymond James set a $19 price target on First Horizon Corporation (NYSE:FHN), while maintaining an ‘Outperform’ rating on the shares. In Q2 2021, First Horizon Corporation (NYSE:FHN) posted an EPS of $0.58, beating the estimates of $0.14.
As of Q2 2021, 27 hedge funds tracked by Insider Monkey have positions in First Horizon Corporation (NYSE:FHN), the same as in the last quarter. The total worth of these stakes is $151.6 million.
Like The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), Exxon Mobil Corporation (NYSE:XOM), Lowe’s Companies, Inc. (NYSE:LOW), and Johnson & Johnson (NYSE:JNJ), First Horizon Corporation (NYSE:FHN) is also gaining investors’ attention in 2021.
9. KT Corporation (NYSE:KT)
Number of Hedge Fund: 14
Dividend Yield: 3.73%
Share Price as of October 20: $13.40
KT Corporation (NYSE:KT) is the largest telecommunications company in South Korea. The company operates as an integrated telecom and digital platform service provider. It ranks ninth on our list of the best dividend-paying stocks under $20.
Recently, KT Corporation (NYSE:KT) has acquired the U.S.-based management consulting company, Epsilon, to enhance its global presence and accelerate digital transformation. In Q2 2021, KT Corporation (NYSE:KT) reported revenue of KRW6.02 T, up 2.6% from the prior-year quarter. Since the beginning of the year, KT Corporation (NYSE:KT) delivered a 21.1% return to shareholders, while its 12-month returns stood at 35.2%.
As of Q2 2021, 14 hedge funds tracked by Insider Monkey have positions in KT Corporation (NYSE:KT), up from 12 in the previous quarter. The total value of these stakes is $181.3 million.
Like The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), Exxon Mobil Corporation (NYSE:XOM), Lowe’s Companies, Inc. (NYSE:LOW), and Johnson & Johnson (NYSE:JNJ), KT Corporation (NYSE:KT) is also one of the most notable dividend stocks in 2021.
Bonhoeffer Capital Management mentioned KT Corporation (NYSE:KT) in its first-quarter 2021 investor letter. Here is what the firm has to say:
“For one of our telecom holdings, KT Corp, we are seeing signs of corporate actions (such as spinoff and JVs) in both foreign comparables (as described above for TI) and domestic competitors like SK Telecom, which recently announced spinoff plans for its non-telecom assets. As mentioned previously, KT has a treasure trove of non-telecom assets, like real estate and media content, that could be spun off. KT has also announced a share buyback of 5% of its stock and returning 50% of its net profits as dividends to shareholders, in addition to investing in growth strategies. In my opinion, these changes are not reflected in the current stock price.”
8. Physicians Realty Trust (NYSE:DOC)
Number of Hedge Fund Holders: 16
Dividend Yield: 5.10%
Share Price as of October 20: $18.64
Physicians Realty Trust (NYSE:DOC) stands eighth on our list of the best dividend-paying stocks under $20. It is an American healthcare real estate company that owns and manages healthcare properties mainly leased to physicians or hospitals.
On September 22, Physicians Realty Trust (NYSE:DOC) announced a quarterly dividend of $0.23 per share, in-line with the previous, yielding 5.10%. The company’s dividend payout ratio stood at 87.62%. Since the beginning of the year, Physicians Realty Trust (NYSE:DOC) delivered a 7.52% return to shareholders.
As of Q2 2021, 16 hedge funds tracked by Insider Monkey have positions in Physicians Realty Trust (NYSE:DOC), compared with 19 in the previous quarter. These stakes are valued at $63.8 million. Cardinal Capital is the company’s leading shareholder, with over 1.3 million shares.
7. Hennessy Advisors, Inc. (NASDAQ:HNNA)
Number of Hedge Fund Holders: 1
Dividend Yield: 5.49%
Share Price as of October 20: $10.48
Hennessy Advisors, Inc. (NASDAQ:HNNA) is an investment management company that provides services to investment companies. The company stands seventh on our list of the best dividend-paying stocks under $20.
On August 4, the company’s board announced a quarterly dividend of $0.1375 per share, yielding 5.49%. Hennessy Advisors, Inc. (NASDAQ:HNNA) has a track record of 4 years of dividend growth. Since the beginning of the year, Hennessy Advisors, Inc. (NASDAQ:HNNA) delivered a 20.9% return to shareholders, while the stock gained 18.5% in the past year.
As of Q2 2021, Renaissance Technology is the only hedge fund having stakes in Hennessy Advisors, Inc. (NASDAQ:HNNA), valued at $1.3 million.
6. Star Group, L.P. (NYSE:SGU)
Number of Hedge Funds: 11
Dividend Yield: 5.51%
Share Price as of October 20: $10.61
Star Group, L.P. (NYSE:SGU) stands sixth on our list of the best dividend-paying stocks under $20. It is a leading provider of energy and related home services. The company specializes in the sales of home heating products for residential and commercial customers.
In Q3 2021, Star Group, L.P. (NYSE:SGU) reported revenue of $283.1 million, showcasing a 21.9% year-over-year growth. The company’s sales volume of home heating oil and propane stood at 38 million gallons. Star Group, L.P. (NYSE:SGU) has a track record of 8 years of dividend growth. The company’s annual dividend stands at $0.57 per share, yielding 5.51%. Since the beginning of the year, Star Group, L.P. (NYSE:SGU) delivered a 10.47% return to shareholders.
As of Q2 2021, 11 hedge funds tracked by Insider Monkey have positions in Star Group, L.P. (NYSE:SGU), up from 6 in the previous quarter. The total value of these stakes is $67.9 million. Bandera Partners is the company’s leading shareholder, with 3.3 million shares.
Like The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), Exxon Mobil Corporation (NYSE:XOM), Lowe’s Companies, Inc. (NYSE:LOW), and Johnson & Johnson (NYSE:JNJ), investors are also paying attention to Star Group, L.P. (NYSE:SGU) amid the company’s long-term growth potential.
Click to continue reading and see the 5 Best Dividend-Paying Stocks Under $20.
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Disclosure. None. 10 best dividend-paying stocks under $20 is originally published on Insider Monkey.
