In this article, we discuss 12 best low-priced dividend stocks to buy. You can skip our detailed analysis of dividend stocks and their performance over the past years, and go directly to read 5 Best Low-Priced Dividend Stocks To Buy.
US equities suffered huge losses in 2022, marking their worst year since the Great Financial Crisis of 2008. However, dividend stocks sustained solid footing during the year due to their ability to generate stable income for shareholders. The companies in the S&P 500 distributed over $561 billion in dividends last year, up 10% from 2021. Moreover, most dividend indexes ended 2022 with positive returns, according to a report by Morningstar. The report also mentioned that there was a 20 percentage-point differential between dividend stocks and the broader market last year.
Considering the market volatility and investors’ inclination toward dividend securities, many companies steadily raised their payouts over the years. High inflationary periods also bode well for dividend growth in the past. During the 2010s, dividend payments in the S&P 500 grew by 155% after recording a 40% growth in each of the previous two decades, as reported by CME Group. The report also revealed that dividend payments rose by 6% and 12% during the high-inflation decades of the 1990s and 2000s, respectively.
Analysts are positive about dividend growth this year as well. Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices, spoke about dividends in his December interview with Wall Street Journal. He asserted that corporate balance sheets are strong enough to generate enough cash for future dividends. The same report also mentioned that many companies have shown confidence in their cash flows and capital investments to fulfill shareholder obligations through dividends in the upcoming years. Among the companies that have gained investors’ attention over the past years include Exxon Mobil Corporation (NYSE:XOM), The Procter & Gamble Company (NYSE:PG), and Johnson & Johnson (NYSE:JNJ). In view of the above-mentioned arguments, we will discuss the best low-priced dividend stocks to buy in this article.
Our Methodology:
For this list, we selected dividend stocks with P/E ratios of less than 15 and share prices below $50, as of January 23. We also measured the hedge fund sentiment around each stock using Insider Monkey’s database of Q3 2022. The stocks are ranked in descending order of their share prices, as recorded on January 23.
12 Best Low-Priced Dividend Stocks To Buy
12. Truist Financial Corporation (NYSE:TFC)
Share Price as of January 23: $48.8
P/E Ratio as of January 23: 11.04
Truist Financial Corporation (NYSE:TFC) is an American bank and holding company, based in North Carolina, US. On January 19, the company announced its Q4 2022 earnings and posted revenue of $6.3 billion, which showed an 11.3% growth from the same period last year. Its average loans amounted to $320.7 billion and its commercial loans stood at $187.5 billion, growing by 3.6% and 4.4% from the previous quarter, respectively.
As of January 23, Truist Financial Corporation (NYSE:TFC) is trading at $48.8 per share and has a price-to-earnings ratio of 11.04, which makes it one of the best low-priced dividend stocks on our list.
Truist Financial Corporation (NYSE:TFC) currently offers a quarterly dividend of $0.52 per share and has a dividend yield of 4.25%, as of January 23. The company has raised its payouts for two years in a row, after ceasing its dividend growth during the pandemic of 2020. It can be added to dividend portfolios alongside popular dividend stocks like Exxon Mobil Corporation (NYSE:XOM), The Procter & Gamble Company (NYSE:PG), and Johnson & Johnson (NYSE:JNJ).
At the end of September, 39 hedge funds tracked by Insider Monkey reported owning stakes in Truist Financial Corporation (NYSE:TFC), up from 33 in the previous quarter. The collective value of these stakes is over $570.2 million. Among these hedge funds, Diamond Hill Capital was the company’s leading stakeholder in Q3.
11. U.S. Bancorp (NYSE:USB)
Share Price as of January 23: $47.4
P/E Ratio as of January 23: 11.33
U.S. Bancorp (NYSE:USB) is a Minnesota-based financial services company that provides personal and consumer banking services to its consumers. On December 13, the company announced a quarterly dividend of $0.48 per share, which fell in line with its previous dividend. The stock’s dividend yield on January 23 came in at 4.05%. In 2022, the company stretched its dividend growth streak to 12 years.
In the third quarter of 2022, U.S. Bancorp (NYSE:USB) reported revenue of $6.33 billion, which saw a 7.5% growth from the same period last year. The company’s average total loan also showed a 13.5% growth from the prior-year quarter. With a share price of $47.4 and a P/E ratio of 11.33, it is among the best low-priced dividend stocks on our list.
In January, UBS upgraded U.S. Bancorp (NYSE:USB) to Buy, with a $55 price target, up from $47. The firm mentioned that the stock is currently attractively valued considering the termination of the Union Bank deal.
At the end of Q3 2022, elite funds remained bullish on U.S. Bancorp (NYSE:USB), with hedge fund positions increasing to 52, from 43 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a total value of roughly $4.8 billion.
10. Pfizer Inc. (NYSE:PFE)
Share Price as of January 23: $45.17
P/E Ratio as of January 23: 8.63
Pfizer Inc. (NYSE:PFE) is an American multinational biotech and pharmaceutical company that mainly rose to prominence after its Covid vaccines. In December, Wells Fargo raised its price target on the stock to $54 with an Overweight rating on the shares, appreciating the company’s data on the treatment of hemophilia B.
On December 9, Pfizer Inc. (NYSE:PFE) declared a 2.5% hike to its quarterly dividend at $0.41 per share. This marked the company’s 13th consecutive year of dividend growth. The stock has a dividend yield of 3.64%, as of January 23. In the third quarter of 2022, it distributed over $6.7 billion in dividends to shareholders.
Pfizer Inc. (NYSE:PFE) is among the best low-priced dividend stocks to buy as it is trading at $45.17 per share with a P/E multiple of 8x, as of January 23.
Pfizer Inc. (NYSE:PFE) was a part of 77 hedge fund portfolios in Q3 2022, up from 70 in the previous quarter, as per Insider Monkey’s database. The collective value of stakes owned by these hedge funds is over $2.4 billion. AQR Capital Management was the company’s leading stakeholder in Q3.
Diamond Hill Capital mentioned Pfizer Inc. (NYSE:PFE) in its Q3 2022 investor letter. Here is what the firm has to say:
“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc. (NYSE:PFE), media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.”
9. Wells Fargo & Company (NYSE:WFC)
Share Price as of January 23: $45.08
P/E Ratio as of January 23: 14.3
Another best low-priced dividend stock on our list is Wells Fargo & Company (NYSE:WFC), which is a California-based multinational financial services company. As of January 23, the stock has a share price of $45.08 and is trading at a PE multiple of 14x.
In January, Citigroup raised its price target on Wells Fargo & Company (NYSE:WFC) to $52 with a Buy rating on the shares. The firm mentioned that the stock remains the ‘best value’ on the board and expects the management to work on its longer-term return aspirations.
Wells Fargo & Company (NYSE:WFC) currently offers a quarterly dividend of $0.30 per share and has a dividend yield of 2.66%, as recorded on January 23.
In the fourth quarter of 2022, Wells Fargo & Company (NYSE:WFC) reported revenue of $19.6 billion, down from $20.8 billion in the prior-year quarter. The company’s average loans for the quarter came in at $948 million, compared with $875 million during the same period last year.
As of the close of Q3 2022, 77 hedge funds tracked by Insider Monkey reported owning stakes in Wells Fargo & Company (NYSE:WFC), compared with 83 in the previous quarter. These stakes have a collective value of roughly $5 billion. With over 23 million shares, Eagle Capital Management owned the largest stake in the company.
8. The Kroger Co. (NYSE:KR)
Share Price as of January 23: $44.69
P/E Ratio as of January 23: 14.05
The Kroger Co. (NYSE:KR) is an American retail company that operates supermarkets and departmental stores throughout the country. On January 20, the company declared a quarterly dividend of $0.26 per share, consistent with its previous dividend. It has been raising its dividends consistently for the past 16 years. The stock has a dividend yield of 2.33%, as of January 23.
In the third quarter of 2022, The Kroger Co. (NYSE:KR) reported revenue of $34.2 billion, which showed a 7.2% growth from the same period last year. In the first nine months of the year, the company generated over $3.3 billion in operating cash flow and paid $494 million to shareholders in dividends.
The Kroger Co. (NYSE:KR) is currently trading at $44.69 per share and has a price-to-earnings ratio of 14.05, which places it as one of the best low-priced dividend stocks on our list.
In January, Morgan Stanley upgraded The Kroger Co. (NYSE:KR) to Equal Weight with a $46 price target, up from $44. The firm highlighted that the company is well-positioned to benefit from a stable backdrop for food this year and steady underlying demand.
Warren Buffett’s Berkshire Hathaway was the largest stakeholder of The Kroger Co. (NYSE:KR) in the third quarter of 2022. Overall, 49 hedge funds tracked by Insider Monkey reported owning stakes in the company in Q3, the same as in the previous quarter. The consolidated value of these stakes is over $4.12 billion.
7. Verizon Communications Inc. (NYSE:VZ)
Share Price as of January 23: $39.6
P/E Ratio as of January 23: 8.62
Verizon Communications Inc. (NYSE:VZ) is a New York-based multinational telecommunications conglomerate. The company is among the best low-priced dividend stocks on our list with a share price of $39.6 and a P/E ratio of 8.62, as of January 23.
In Q3 2022, Verizon Communications Inc. (NYSE:VZ) posted revenue of $34.2 billion, which presented a 4% growth from the same period last year. The company’s cash position also remained stable during the first nine months of the year, with its operating cash flow of $28.2 billion and a free cash flow of $12.4 billion.
Verizon Communications Inc. (NYSE:VZ) holds a 16-year track record of consistent dividend growth, which is one of the longest in the US telecom industry. The company currently pays a quarterly dividend of $0.6525 per share and has a dividend yield of 6.59%, as of January 23.
In December, MoffettNathanson upgraded Verizon Communications Inc. (NYSE:VZ) to Market Perform with a $41 price target, highlighting the company’s performance last year.
Verizon Communications Inc. (NYSE:VZ) saw growth in hedge fund positions in Q3 2022, as 62 funds in Insider Monkey’s database owned stakes in the company, up from 58 in the previous quarter. The collective value of these stakes is over $1.42 billion.
Mawer Investment Management mentioned Verizon Communications Inc. (NYSE:VZ) in its Q3 2022 investor letter. Here is what the firm has to say:
“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) has been impacted as wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”
6. Franklin Resources, Inc. (NYSE:BEN)
Share Price as of January 23: $30.2
P/E Ratio as of January 23: 11.98
Franklin Resources, Inc. (NYSE:BEN) is an American multinational holding company, based in California. The company mainly provides investment services to its consumers. On December 13, the company declared a 3% growth in its quarterly dividend to $0.30 per share. This was the company’s 43rd consecutive year of dividend growth. As of January 23, the stock has a dividend yield of 3.96%.
In fiscal Q4 2022, Franklin Resources, Inc. (NYSE:BEN) reported revenue of roughly $2 billion, which beat Street estimates by $170 million. The company also paid $773 million to shareholders in dividends and share repurchases during FY21. Considering its commitment to shareholders, the company is a good investment option alongside Exxon Mobil Corporation (NYSE:XOM), The Procter & Gamble Company (NYSE:PG), and Johnson & Johnson (NYSE:JNJ).
As of January 23, Franklin Resources, Inc. (NYSE:BEN) is trading at $30.2 per share and has a P/E multiple of 11x, which makes it one of the best low-priced dividend stocks to buy.
At the end of September, 25 hedge funds in Insider Monkey’s database owned stakes in Franklin Resources, Inc. (NYSE:BEN), up from 24 in the previous quarter. These stakes have a collective value of nearly $126 million.
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Disclosure. None. 12 Best Low-Priced Dividend Stocks To Buy is originally published on Insider Monkey.