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11 Best Dividend Stocks Under $5

In this article, we discuss 11 best dividend stocks under $5. You can skip our detailed analysis of dividend investing and returns of dividend stocks relative to the broader market, and go directly to read 5 Best Dividend Stocks Under $5

The investment trends are consistently changing this year as stock markets come under pressure due to rising inflation. Investors are leaning on previously overlooked defensive securities while dumping growth tech stocks. Moreover, in the current rising interest rate environment, investors are finding solace in dividend stocks. The tech-heavy NASDAQ recorded a harsh decline of 29.4% this year, compared with a 19.2% drop in the S&P 500, as of the close of October 25.

Over the years, dividend stocks have generated returns that have surpassed the broader market. Especially dividend reinvestments have a significant impact on overall returns. In the last 15 years ending August 2021, the total return of dividend stocks with reinvestments stood at 10.62%, compared with a 6.89% price return, as reported by CIBC Asset Management. The report also mentioned that the High Dividend Index for Canada, America, and the World has outperformed the broader market from 2001 to 2020. According to analysts, investing in dividends can be trickier as investors often fall victim to troubled companies paying hefty dividends. Rather investors should focus on quality companies boasting dividend growth track records with the potential to maintain those payments. Some popular dividend stocks include Altria Group, Inc. (NYSE:MO), JPMorgan Chase & Co. (NYSE:JPM), and Pfizer Inc. (NYSE:PFE).

In addition to dividend stocks, mutual funds that specialize in dividend securities have seen record inflows this year. According to a report by Bloomberg, inflows in dividend ETFs grew 25% from the previous record of 2021, reporting positive inflows every month this year. Bloomberg Intelligence estimates high dividend ETFs to double their inflows this year.

Our Methodology:

For this list, we selected stocks that have share prices below $5 and pay dividends to shareholders. We analyzed these companies through their financials, balance sheets, and dividend policies. The stocks are ranked according to their share prices, as of October 27.

Best Dividend Stocks Under $5

11. Diversified Healthcare Trust (NASDAQ:DHC)

Share Price as of October 27: $1.20

Diversified Healthcare Trust (NASDAQ:DHC) is an American real estate investment trust company that owns and managed high-quality healthcare properties across 36 states in the US. At the end of June 2022, the company had approximately $868.4 million available in cash and cash equivalents, compared with $634.8 million six months ago. The company’s revenue in Q2 2022 amounted to $313 million.

Diversified Healthcare Trust (NASDAQ:DHC) has not raised its dividend since the pandemic of 2020 unlike some of the best dividend stocks like Altria Group, Inc. (NYSE:MO), JPMorgan Chase & Co. (NYSE:JPM), and Pfizer Inc. (NYSE:PFE), which raised their dividends during this period. However, the company paid regular dividends to shareholders over these years. The company currently offers a quarterly dividend of $0.10 per share and has a dividend yield of 3.33%, as of October 27.

As per Insider Monkey’s Q2 2022 database, 24 hedge funds owned stakes in Diversified Healthcare Trust (NASDAQ:DHC), up from 21 in the previous quarter. These stakes have a collective value of over $32.7 million.

10. Lloyds Banking Group plc (NYSE:LYG)

Share Price as of October 27: $1.94

Lloyds Banking Group plc (NYSE:LYG) is one of the UK’s largest financial services companies with over 30 million customers worldwide. In October, JPMorgan maintained an Overweight rating on the stock with a 56 GBP price target, appreciating the company’s earnings in the recent quarter.

In the first half of FY22, Lloyds Banking Group plc (NYSE:LYG) paid £550 million in dividends to shareholders. The company has also completed £1.3 billion worth of its share buyback program. Its net interest income for this period came in at £6.14 billion, up 13.3% from the same period last year.

Lloyds Banking Group plc (NYSE:LYG) currently pays a quarterly dividend of $0.038 per share. The stock has a dividend yield of 5.32%, as recorded on October 27.

At the end of Q2 2022, 9 hedge funds tracked by Insider Monkey owned stakes in Lloyds Banking Group plc (NYSE:LYG), up from 8 in the previous quarter. The collective value of these stakes is over $31.6 million. With roughly 10 million shares, Arrowstreet Capital was the company’s largest stakeholder in Q2.

9. Mizuho Financial Group, Inc. (NYSE:MFG)

Share Price as of October 27: $2.24

Mizuho Financial Group, Inc. (NYSE:MFG) is a Tokyo-based bank holding company that offers financial and strategic services to its consumers. In fiscal Q1 2022, the company reported an ordinary income of 1.24 trillion JPY, which shows a 67.6% growth from the same period last year. It reported roughly 54 trillion JPY in cash and due from the banks at the end of the quarter.

Mizuho Financial Group, Inc. (NYSE:MFG) currently pays a quarterly dividend of 20 JPY and has a dividend yield of 6.88%, as of October 27.

In August, Daiwa upgraded Mizuho Financial Group, Inc. (NYSE:MFG) to Outperform with a 1,700 JPY price target, appreciating the company’s strong earnings and strategic management.

As of the close of Q2 2022, 7 hedge funds tracked by Insider Monkey owned stakes in Mizuho Financial Group, Inc. (NYSE:MFG), compared with 8 in the previous quarter. These stakes have a total value of over $8 million. Among these hedge funds, Renaissance Technologies owned the largest stake in the banking company, worth nearly $9 million.

8. Silvercorp Metals Inc. (NYSE:SVM)

Share Price as of October 27: $2.53

Silvercorp Metals Inc. (NYSE:SVM) is a Canadian precious metals company that is involved in the exploration and development of silver-containing properties. The company pays dividends twice a year. Currently, it pays a semi-annual dividend of $0.0125 per share, with a dividend yield of 0.99%.

In August, Silvercorp Metals Inc. (NYSE:SVM) announced a share repurchase program for over 7 million of its common shares. These shares represent approximately 4% of the company’s 177 million shares outstanding as of August. The program will expire in August 2023.

In fiscal Q1 2023, Silvercorp Metals Inc. (NYSE:SVM) reported revenue of roughly $64 million, up from $58.8 million during the same period last year. At the end of June, the company had over $150.2 million available in cash and cash equivalents, compared with $113.3 million six months ago. The company is one of the best dividend stocks on our list as it paid nearly $2.2 million to shareholders in dividends during Q1.

At the end of Q2 2022, 8 hedge funds in Insider Monkey’s database owned stakes in Silvercorp Metals Inc. (NYSE:SVM), the same as in the previous quarter. These stakes have a total value of $26.4 million, compared with $37.2 million worth of stakes owned by hedge funds in the preceding quarter. Sprott Asset Management was one of the company’s most prominent stakeholders in Q2.

7. New York Mortgage Trust, Inc. (NASDAQ:NYMT)

Share Price as of October 27: $2.62

New York Mortgage Trust, Inc. (NASDAQ:NYMT) is an American real estate investment trust company that delivers stable distributions to its customers. In October, B. Riley maintained a Buy rating on the stock with a $5 price target. The firm expects the company to generate stable results in the upcoming quarter and also presented a positive outlook on fixed-income markets.

New York Mortgage Trust, Inc. (NASDAQ:NYMT) currently pays a quarterly dividend of $0.10 per share and has a dividend yield of 15.27%, as of October 27.

In the second quarter of 2022, New York Mortgage Trust, Inc. (NASDAQ:NYMT) reported an operating cash flow of over $40 million, compared with $38.1 million in the previous quarter. The company’s total net interest income came in at $26.1 million. It also reported a portfolio net interest margin of 3.48% and a book value of $4.06 per share.

As of the end of the June quarter, 9 hedge funds in Insider Monkey’s database owned stakes in New York Mortgage Trust, Inc. (NASDAQ:NYMT), down from 12 in the preceding quarter. These stakes are collectively valued at over $35 million. With over 5 million shares, Balyasny Asset Management was the company’s leading stakeholder in Q2.

6. Harmony Gold Mining Company Limited (NYSE:HMY)

Share Price as of October 27: $2.86

Harmony Gold Mining Company Limited (NYSE:HMY) is the largest gold mining company in South Africa. The company possesses nine underground mines and several surface operations in the country. Recently, the company announced the acquisition of the Eva Copper project in Australia for $170 million plus a contingent payment of over $60 million. The acquisition is made to extend its diversification into copper.

In September, UBS expressed concerns regarding the company’s earnings but the firm recommends increasing exposure to gold. In view of this, the firm maintained a Neutral rating on Harmony Gold Mining Company Limited (NYSE:HMY) with a ZAR 47 price target.

On October 12, Harmony Gold Mining Company Limited (NYSE:HMY) announced an interim dividend of $0.01 per share, consistent with its previous dividend. As of October 27, the stock’s dividend yield came in at 1.38%. The company can be a good addition to dividend portfolios due to its different dividend policy alongside some of the best dividend stocks like Altria Group, Inc. (NYSE:MO), JPMorgan Chase & Co. (NYSE:JPM), and Pfizer Inc. (NYSE:PFE).

At the end of Q2 2022, 8 hedge funds tracked by Insider Monkey reported owning stakes in Harmony Gold Mining Company Limited (NYSE:HMY), down from 11 in the previous quarter. These stakes have a total value of over $108.5 million.

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Disclosure. None. 11 Best Dividend Stocks Under $5 is originally published on Insider Monkey.

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