13 Best Dividend Stocks to Buy Under $50

1. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 98

Share Price as of the Close of December 20: $44.17

Bank of America Corporation (NYSE:BAC) is a North Carolina-based financial services company and an investment bank. Recent interest rate hikes have had mixed effects on the bank. On the positive side, net interest income rose to $56.9 billion, a 33% increase over the two years ending in 2023. However, the bank has also faced a significant rise in unrealized losses in its loan portfolio, which grew from $14 billion in 2021 to $102 billion last year.

This was also highlighted by Diamond Hill Capital in its Q2 2024 investor letter. Here is what the firm has to say:

“Other top contributors in Q2 included Bank of America Corporation (NYSE:BAC) and Extra Space Storage. Shares of financial services company Bank of America rose in the quarter as it looks increasingly likely net interest income will inflect and begin growing again in 2024’s back half and into 2025.”

Bank of America Corporation (NYSE:BAC) enjoys strong competitive advantages that reinforce its position in the industry, protecting it from both traditional competitors and emerging fintech companies. Its extensive distribution network, combining a robust digital presence with a wide-reaching branch system, enables the bank to expand its low-cost deposit base and attract new customers, generating additional revenue opportunities. In addition, the bank’s large scale allows it to effectively manage its costs, ensuring consistent profitability. The strength of the company brand also appeals to both existing and potential customers. The stock has surged by nearly 31% in 2024 so far.

Bank of America Corporation (NYSE:BAC) is one of the best dividend stocks on our list as the company has never missed a dividend in 26 years. Currently, it pays a quarterly dividend of $0.26 per share and has a dividend yield of 2.34%, as of December 23. Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q3.

Overall, Bank of America Corporation (NYSE:BAC) ranks first on our list of the best dividend stocks under $50. While we acknowledge the potential for BAC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. 

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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