What are the best dividend stocks under $50?
The risks of a global recession are rising, with equity markets showing their worst performance since the recession of 2008. According to a probability model by Ned Davis Research, there is currently a 98.1% chance of a recession globally. The only other time the probability model showed such results was during the global financial crisis of 2008 and 2009, according to a report by Bloomberg. This current economic downturn has made investors explore different investment strategies to cope with uncertainty.
Dividend stocks are becoming increasingly popular among investors because of their ability to generate regular income. Analysts around the world are recommending adding dividend stocks to portfolios to fight the current economic instability.
Austin Graff, co-chief investment officer at Titleist Asset Management, gave a positive stance about dividend investing in his interview with CNN this September. He said that dividend-paying stocks perform well during inflation because these companies have sound fundamentals and strong balance sheets. He further said that investors should focus on dividend companies with solid histories of raising their dividends as these companies have stable free cash flow generation to support their dividends.
According to a report published by ProShares, companies with proven track records of dividend growth have delivered better returns than the broader index. From April 2010 to March 2015, the S&P 500 returned 14.47% while the S&P 500 Dividend Aristocrats delivered a 16.83% return to shareholders. Some of the best dividend stocks like The Coca-Cola Company (NYSE:KO), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ) are favored by investors as these companies boast decades-long dividend growth streaks. Further in this article, we will discuss the best dividend-paying stocks under $50.
Photo by Sharon McCutcheon on Unsplash
Our Methodology:
The stocks mentioned in this article have share prices below $50, as of September 30. These companies have strong dividend growth histories and solid balance sheets, which makes them reliable investment options in this current economic crisis. The stocks are ranked from the lowest share price to the highest.
11. Star Group, L.P. (NYSE:SGU)
Share Price as of September 30: $8.25
Star Group, L.P. (NYSE:SGU) is an American provider of full-service energy and also specializes in the sales of home heating and air conditioning products to residential and commercial consumers. In fiscal Q3 2022, the company reported revenue of $440 million, up 55% from the same period last year. The company’s operating cash flow for the quarter came in at $74 million and its free cash flow stood at nearly $70 million.
Star Group, L.P. (NYSE:SGU) has been paying dividends to shareholders since 1996. The company maintains a nine-year streak of consistent dividend growth, with a five-year dividend CAGR of 6.78%. As of September 30, the stock’s dividend yield came in at 7.39%.
At the end of Q2 2022, 9 hedge funds tracked by Insider Monkey owned stakes in Star Group, L.P. (NYSE:SGU), up from 8 a quarter earlier. The collective value of these stakes is over $50.3 million. With nearly 3.5 million shares, Bandera Partners was the company’s leading stakeholder in Q2.
In addition to some of the best dividend stocks like The Coca-Cola Company (NYSE:KO), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ), investors are considering Star Group, L.P. (NYSE:SGU) due to its strong dividend credentials.
10. Kennedy-Wilson Holdings, Inc. (NYSE:KW)
Share Price as of September 30: $15.34
Kennedy-Wilson Holdings, Inc. (NYSE:KW) is a California-based real estate agent and managers company that specializes in acquiring undervalued commercial, multifamily, and residential assets in high-growth markets. On August 3, the company declared a quarterly dividend of $0.24 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 10 years. As of September 30, the stock’s dividend yield came in at 6.26%.
In Q2 2022, Kennedy-Wilson Holdings, Inc. (NYSE:KW) missed Street estimates on various fronts, however, the company’s revenue for the quarter showed a 25.6% year-over-year growth at $136 million. Its operating cash flow stood at $37.4 million and its free cash flow was recorded at $4.3 million. The company ended the quarter with $460.6 million available in cash and cash equivalents.
In September, Deutsche Bank maintained its Buy rating on Kennedy-Wilson Holdings, Inc. (NYSE:KW) with a $21 price target, highlighting the company’s growing revenue and its strong fundamentals.
As of the close of Q2 2022, 11 hedge funds in Insider Money’s database owned stakes in Kennedy-Wilson Holdings, Inc. (NYSE:KW), the same as in the previous quarter. These stakes hold a collective value of nearly $450 million, compared with $577 million worth of stakes owned by hedge funds a quarter earlier.
9. KeyCorp (NYSE:KEY)
Share Price as of September 30: $16.03
KeyCorp (NYSE:KEY) is an Ohio-based financial services company that provides investment management, lending, credit card, and other advisory services. In September, Wedbush initiated its coverage of the stock with a Neutral rating and an $18 price target. The firm mentioned that the company is all set to achieve its targeted scale across select business lines.
In Q2 2022, KeyCorp (NYSE:KEY) reported strong results. The company posted a GAAP EPS of $0.54 and revenue of $1.8 billion, beating estimates by $0.03 and $30 million, respectively. Its revenue for the quarter jumped 6% from the same period last year and has shown strong loan growth across commercial and consumer businesses.
KeyCorp (NYSE:KEY) has been raising its dividends consistently for the past 11 years. In the past five years, the company’s dividend CAGR came in at 16.72%, which makes it one of the best dividend stocks under $50. It currently pays a quarterly dividend of $0.195 per share and has a dividend yield of 4.86%, as recorded on September 30.
At the end of June 2022, 37 hedge funds tracked by Insider Monkey owned stakes in KeyCorp (NYSE:KEY), down from 38 in the previous quarter. These stakes have a total value of over $338.4 million. Adage Capital Management was the company’s leading stakeholder in Q2, owning stakes worth over $77 million.
8. Sierra Bancorp (NASDAQ:BSRR)
Share Price as of September 30: $20.05
Sierra Bancorp (NASDAQ:BSRR) is a California-based bank holding company that provides retail and commercial banking services to individual and institutional investors. At the end of Q2 2022, the company was a part of 6 hedge fund portfolios, up from 5 in the previous quarter, according to Insider Monkey’s data. The stakes owned by these hedge funds hold a collective value of over $9.6 million.
In Q2 2022, Sierra Bancorp (NASDAQ:BSRR) reported revenue of $37.02 million, which showed a 20.1% growth from the same period last year. The company’s cash position remained stable during the quarter, with $5 million in operating cash flow and $4.6 million in free cash flow. At the end of June, it had $161.8 million available in cash and cash equivalents, and its total assets amounted to $2.28 billion.
On July 22, Sierra Bancorp (NASDAQ:BSRR) declared a quarterly dividend of $0.23 per share, which was the company’s 94th consecutive quarterly dividend. The company has been raising its dividends consistently for the past nine years, coming through as one of the best dividend stocks under $50. As of September 30, the stock’s dividend yield came in at 4.96%.
7. Ames National Corporation (NASDAQ:ATLO)
Share Price as of September 30: $22.14
Ames National Corporation (NASDAQ:ATLO) is an American bank holding company that provides related banking services. At the end of June 2022, the company reported $2.1 billion in assets under management, up from $2 billion in the same period last year. It had over $74.6 million available in cash and cash equivalents and other assets stood at over $5.1 million. Moreover, the company’s operating cash flow came in at $4.2 million and its free cash flow was recorded at $3.3 million.
Ames National Corporation (NASDAQ:ATLO) currently pays a quarterly dividend of $0.27 per share and has a dividend yield of 4.80%, as of September 30. The company holds an 11-year track record of consistent dividend payments and its five-year dividend CAGR is 4.27%.
Stadium Capital Management owned stakes worth over $6.2 million in Ames National Corporation (NASDAQ:ATLO), becoming the company’s largest stakeholder in Q2. Overall, 6 hedge funds tracked by Insider Monkey owned stakes in the company in Q2, worth over $12 million.
6. Union Bankshares, Inc. (NASDAQ:UNB)
Share Price as of September 30: $22.29
Union Bankshares, Inc. (NASDAQ:UNB) is a Vermont-based bank holding company that offers retail and commercial banking services to investors. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past nine years. It currently pays a quarterly dividend of $0.35 per share for a dividend yield of 6.41%, as recorded on September 30.
In Q2 2022, Union Bankshares, Inc. (NASDAQ:UNB) reported a stable cash position. Its operating cash flow stood at $1.57 million and its free cash flow came in at $1.45 million. The company’s net income for the quarter jumped to nearly $3 million, from $2.4 million in the preceding quarter. Moreover, its revenue of $9.7 million showed a 9% year-over-year growth.
At the end of Q2 2022, 2 hedge funds tracked by Insider Monkey owned stakes in Union Bankshares, Inc. (NASDAQ:UNB), the same as in the previous quarter. The total value of these stakes is $904,000.
Union Bankshares, Inc. (NASDAQ:UNB) can be a good addition to dividend portfolios, alongside some of the best dividend stocks, such as The Coca-Cola Company (NYSE:KO), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ).
Click to continue reading and see 5 Best Dividend Paying Stocks Under $50.
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Disclosure. None. 11 Best Dividend Paying Stocks Under $50 is originally published on Insider Monkey.
