In this article, we discuss 12 best dividend stocks under $5. You can skip our detailed analysis of dividend stocks and their historical performance, and go directly to read 5 Best Dividend Stocks Under $5.
In 2022, dividends were a popular choice for investors, with S&P 500 companies paying a record $565 billion in dividends. During a tough year, investors turned to dividend-paying companies for the income they offered. These companies and certain dividend-focused ETFs performed better than the overall S&P 500 index last year.
Dividend investing strategies are well-regarded for delivering appealing long-term returns, especially in terms of risk-adjusted returns. This is because they offer defensive benefits, which means they tend to experience less price fluctuation when the market is performing poorly, making them a relatively stable choice in such conditions on average. The consistency of dividends in supporting stock market returns becomes evident when considering that they have played a notable role, constituting 40% of the market’s returns since 1930, and an even larger 54% during decades with high inflation, as reported by Fidelity.
The stability of dividend strategies, known for their resilience, is connected to specific traits commonly seen in companies that pay and increase dividends. The capacity to consistently pay and boost dividends is generally considered a sign of dependable earnings and growth. According to a report by Abrdn, dividend growers and initiators outperformed non-dividend payers over the past 20 years ending in December 2022. This group has also shown superior performance compared to no-change dividend payers, as well as no dividend payers. Another significant benefit of dividend investing is the reduced risk it offers, leading to historically attractive risk-adjusted returns over the long term. The report illustrates that among global equities, Dividend Growers and Initiators have notably lower annual return volatility compared to companies that don’t pay dividends and dividend cutters & eliminators.
Some of the best dividend stocks that hold decades-long dividend growth track records include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP). These stocks have not only consistently increased their dividend payments over the years but also maintained a strong cash position, indicating their ability to keep raising their payouts in the future. In this article, we will discuss dividend stocks to buy under $5.
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Our Methodology:
We scanned Insider Monkey’s database of 910 hedge funds and picked 12 dividend stocks priced under $5 as of October 28. We preferred companies with stable dividend histories. The stocks are ranked in ascending order of the number of hedge funds having stakes in them as of Q2 2023.
12. Network-1 Technologies, Inc. (NYSE:NTIP)
Number of Hedge Fund Holders: 2
Share Price as of October 28: $2.12
Network-1 Technologies, Inc. (NYSE:NTIP) is an American tech company that primarily focuses on the development and licensing of intellectual property and technology solutions. On September 8, the company declared a semi-annual dividend of $0.05, which was in line with its previous dividend. It started paying dividends in 2016 and has paid regular dividends to shareholders since then, which makes NTIP one of the best dividend stocks on our list. The stock’s dividend yield on October 28 came in at 4.72%.
Other dividend stocks with strong dividend growth include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
Network-1 Technologies, Inc. (NYSE:NTIP) reported a strong cash position in the second quarter of 2023. The company ended the quarter with over $16.6 million available in cash and cash equivalents, up from $13.4 million at the end of December 2022.
At the end of Q2 2023, 2 hedge funds tracked by Insider Monkey reported having stakes in Network-1 Technologies, Inc. (NYSE:NTIP), which remained unchanged from the previous quarter. The collective value of these stakes is over $1.2 million. Cannell Capital owned the largest stake in the company.
11. Global Self Storage, Inc. (NASDAQ:SELF)
Number of Hedge Fund Holders: 4
Share Price as of October 28: $4.46
Global Self Storage, Inc. (NASDAQ:SELF) is a real estate investment trust company that specializes in owning, operating, and managing self-storage facilities. In the second quarter of 2023, the company reported revenue of $3.09 million, which showed a 3.7% growth from the same period last year. The company ended the quarter with over $6.6 million in cash and cash equivalents, compared with $6.3 million six months ago.
Global Self Storage, Inc. (NASDAQ:SELF) has been making regular dividend payments to shareholders since 1998. It currently pays a quarterly dividend of $0.0725 per share and has a dividend yield of 6.50%, as of October 28.
As of the end of Q2 2023, 4 hedge funds in Insider Monkey’s database owned stakes in Global Self Storage, Inc. (NASDAQ:SELF), up from 3 in the previous quarter. The overall value of these stakes is $285,000.
10. ARC Document Solutions, Inc. (NYSE:ARC)
Number of Hedge Fund Holders: 8
Share Price as of October 28: $2.79
ARC Document Solutions, Inc. (NYSE:ARC) is a California-based company that provides specialized document management and printing services, primarily focused on serving the architecture, engineering, and construction (AEC) industries, as well as other businesses that require document solutions.
ARC Document Solutions, Inc. (NYSE:ARC) initiated its dividend policy in 2019 and has paid uninterrupted dividends to shareholders since then. The company currently offers a quarterly dividend of $0.05 per share and has a dividend yield of 7.17%, as of October 28.
At the end of June 2023, 8 hedge funds in Insider Monkey’s database reported having stakes in ARC Document Solutions, Inc. (NYSE:ARC), which was the same as in the previous quarter. These stakes have a total worth of over $3.2 million.
9. VAALCO Energy, Inc. (NYSE:EGY)
Number of Hedge Fund Holders: 11
Share Price as of October 28: $4.42
VAALCO Energy, Inc. (NYSE:EGY) is an independent energy company that focuses on the exploration, development, and production of oil and natural gas. The company has been paying regular dividends to shareholders since 2021, which makes EGY one of the best dividend stocks to buy under $5. It currently pays a quarterly dividend of $0.0625 per share for a dividend yield of 5.66%, as reported on October 28.
VAALCO Energy, Inc. (NYSE:EGY) was a part of 11 hedge fund portfolios at the end of Q2 2023, compared with 15 in the previous quarter, according to Insider Monkey’s database. The collective value of stakes owned by these hedge funds is over $21.7 million. With 2.7 million shares, Sabrepoint Capital was the company’s leading stakeholder in Q2.
8. Silvercorp Metals Inc. (NYSE:SVM)
Number of Hedge Fund Holders: 12
Share Price as of October 28: $2.3
Silvercorp Metals Inc. (NYSE:SVM) is a Canadian mining company that primarily focuses on the exploration, acquisition, development, and production of silver and other base metals. The company offers a semi-annual dividend of $0.0125 per share for a dividend yield of 1.09%, as of October 28.
In fiscal Q1 2023, Silvercorp Metals Inc. (NYSE:SVM) reported revenue of $60 million, which beat analysts’ estimates by $1.61 million. The company’s cash position also remained stable as it generated nearly $30 million in operating cash flow during the quarter. In addition to this, it also paid $2.2 million to shareholders in dividends during the quarter, which makes SVM one of the best dividend stocks on our list.
The number of hedge funds having stakes in Silvercorp Metals Inc. (NYSE:SVM) grew to 12 in Q2 2023, from 9 in the previous quarter, as per Insider Monkey’s database. The consolidated value of these stakes is over $18.4 million. Among these hedge funds, Two Sigma Advisors was the company’s leading stakeholder in Q2.
7. Safe Bulkers, Inc. (NYSE:SB)
Number of Hedge Fund Holders: 13
Share Price as of October 28: $3.18
Safe Bulkers, Inc. (NYSE:SB) is a shipping company that primarily focuses on the transportation of dry bulk goods by sea. The company currently pays a quarterly dividend of $0.05 per share and has a dividend yield of 6.29%, as of October 28. It is among the best dividend stocks under $5.
In the second quarter of 2023, Safe Bulkers, Inc. (NYSE:SB) reported revenue of $70.6 million, which fell by 23% from the same period last year, but beat analysts’ consensus by $12.1 million. The company ended the quarter with over $88.5 million available in total cash.
As of the end of Q2 2023, 13 hedge funds tracked by Insider Monkey owned stakes in Safe Bulkers, Inc. (NYSE:SB), up from 11 in the previous quarter. The consolidated value of these stakes is nearly $6 million. The largest stakeholder of the company is AQR Capital Management.
6. Nordic American Tankers Limited (NYSE:NAT)
Number of Hedge Fund Holders: 16
Share Price as of October 28: $4.77
Nordic American Tankers Limited (NYSE:NAT) ranks sixth on our list of the best dividend stocks under $5. The Bermuda-based shipping company specializes in the transportation of crude oil using its fleet of oil tankers. It has a 28-year run of paying regular dividends to shareholders and it currently pays a quarterly dividend of $0.15 per share. The stock’s dividend yield on October 28 came in at 10.06%.
NAT can be added to dividend portfolios alongside some other dividend stocks such as The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
At the end of the June quarter of 2023, 16 hedge funds in Insider Monkey’s database reported having stakes in Nordic American Tankers Limited (NYSE:NAT), down from 23 in the preceding quarter. The collective value of these stakes is more than $50.7 million.
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Disclosure. None. 12 Best Dividend Stocks Under $5 is originally published on Insider Monkey.
