In this article, we will take a look at the 10 Best Affordable Dividend Stocks to Buy.
Dividend stocks are the shares of publicly listed companies that regularly distribute a portion of the company’s earnings to the shareholders. High-quality dividend stocks have a long history of regular dividend payments to their shareholders with the top-tier dividend stocks increasing their dividend payouts over time, allowing the shareholders to build a regular cash stream.
Individuals can invest in dividend stocks directly, by adding individual dividend stocks to their portfolio, or through investments in mutual funds and Exchange Traded Funds (ETFs). There are multiple ETFs that provide access to investments in high-yield dividend companies, such as the Vanguard High Dividend Yield ETF with dividend yield of 2.7%.
Global markets have been going through a rough patch with fears of a potential economic recession due to inflation and tighter monetary policies implemented by central banks.
If economic data continues to miss expectations, stocks could continue to decline. Given the uncertainty, it could be a good idea to own a diversified portfolio across different stocks and sectors. There could also be an opportunity for long term investors to buy quality blue chip stocks.
Methodology
For our list of 10 Best Affordable Dividend Stocks to Buy, we took 10 stocks that had a dividend yield of over 1% and that were substantially below the average analyst price target. To find affordable stocks, we picked only stocks trading below $25 per share as of September 27. We then used the collective wisdom of hedge funds and ranked the stocks based on the number of hedge funds in our database that held shares in the same stocks at the end of Q2 2022.
10 Best Affordable Dividend Stocks to Buy
10. Credit Suisse Group AG (NYSE:CS)
Stock Price as of September 27: $3.98
Dividend Yield as of September 27: 2.54%
Number of Hedge Fund Holders: 9
Zurich-based Credit Suisse Group AG (NYSE:CS) is a leading financial services provider with a focus on wealth management, investment banking, and asset management services. With a history dating back to 1856, the financial services provider has a global reach extending to 50 countries worldwide and had CHF 1.6 trillion in assets under management, as of end 2021.
Given the uncertain markets, Credit Suisse Group AG shares have declined by 58.40% year to date as of September 27. Analysts, nevertheless think there could be upside in the banking stock with the average analyst price target of $6.24 per share.
As of Q2 2022, 9 out of the 895 hedge funds tracked by Insider Monkey were bullish on Credit Suisse Group AG and held its shares valued at $13 million. Two Sigma Advisors was the largest shareholder holding 1.3 million shares valued at $7 million.
Alongside Healthpeak Properties, Inc. (NYSE:PEAK), Warner Music Group Corp. (NASDAQ:WMG), and Albertsons Companies, Inc. (NYSE:ACI), Credit Suisse Group AG is an affordable dividend stock owned by many hedge funds in our database at the end of Q2 2022.
9. Barclays PLC (NASDAQ:BCS)
Stock Price as of September 27: $6.72
Dividend Yield as of September 27: 6.31%
Number of Hedge Fund Holders: 13
Barclays PLC (NASDAQ:BCS) is a London-based universal bank providing financial services across consumer banking and payments operations around the world, as well as global corporate and investment banking. Its history dates back to more than 325 years ago and currently operates in more than 40 countries worldwide.
Similar to several other financial industry stocks, Barclays PLC shares have lost significant value since the beginning of the year and have registered a 35.07% year-to-date decline as of September 27. Its current valuation offers an upside potential of 37% based on the average analyst price target of $9.19 for its ADRs.
As of Q2 2022, Barclays PLC shares were held by 13 of the 895 hedge funds tracked by Insider Monkey, valued at $152 million. Arrowstreet Capital was its biggest shareholder with ownership of 10.8 million shares valued at $82 million.
8. Deutsche Bank AG (NYSE:DB)
Stock Price as of September 27: $7.73
Dividend Yield as of September 27: 2.73%
Number of Hedge Fund Holders: 16
Frankfurt-based Deutsche Bank AG (NYSE:DB) provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments, and institutional investors.
As of September 27, Deutsche Bank AG shares have lost 38.16% of its value since the beginning of the year and trade at a forward P/E ratio of 4.37. Despite the significant drop in its valuations, analysts have an average price target of $11.43 per share.
As of Q2 2022, 16 of the 895 hedge funds tracked by Insider Monkey owned shares of Deutsche Bank AG, valued at $935 million. Its largest shareholder was Hudson Executive Capital with ownership of 67.4 million shares valued at $587 million.
7. Hewlett Packard Enterprise Company (NYSE:HPE)
Stock Price as of September 27: $12.04
Dividend Yield as of September 27: 3.99%
Number of Hedge Fund Holders: 37
Hewlett Packard Enterprise Company (NYSE:HPE), based in Houston, Texas, is an edge-to-cloud company offering intelligent technology solutions as a service – spanning Cloud Services, Compute, High Performance Computing & AI, Intelligent Edge, Software, and Storage.
The board of Directors of Hewlett Packard Enterprise Company declared a regular quarterly cash dividend of $0.12 per common share in August.
As of September 27, Hewlett Packard Enterprise Company shares were down 23.65% year-to-date with the forward P/E ratio currently at 5.69. Analysts have an average price target of $16.29.
On August 31, Deutsche Bank analyst Sidney Ho lowered the price target on Hewlett Packard Enterprise Company shares to $15 from $16 and maintained a ‘Hold’ rating on the shares.
As of Q2 2022, 37 of the 895 hedge funds tracked by Insider Monkey were long Hewlett Packard Enterprise Company, holding shares worth $709 million. Its largest hedge fund shareholder is Pzena Investment Management with ownership of 32 million shares valued at $425 million.
6. KeyCorp (NYSE:KEY)
Stock Price as of September 27: $15.96
Dividend Yield as of September 27: 4.89%
Number of Hedge Fund Holders: 37
Based in Cleveland, Ohio, KeyCorp (NYSE:KEY) is a full-service commercial, corporate, and investment bank focused primarily on serving middle market clients within targeted industry sectors. It also provides services across commercial mortgage finance and servicing, equipment finance, public finance, and commercial payments.
The shares of banking and financial services companies have underperformed this year driven by fears of a recession. KeyCorp has been no exception as its shares have lost 31% of their value year-to-date, as of September 27, and trade at a forward P/E ratio of 6.71. Despite the downturn, analysts hold an average price target of $22.10 for its shares.
As of Q2 2022, 37 hedge funds tracked by Insider Monkey held shares of KeyCorp, worth $338 million. Adage Capital Management is its largest hedge fund shareholder with ownership of 4.5 million shares valued at $77 million.
Like KeyCorp, Healthpeak Properties, Inc., Warner Music Group Corp., and Albertsons Companies, Inc. are affordable dividend stocks that are widely owned by many hedge funds in our database at the end of Q2 2022.
5. Kimco Realty Corporation (NYSE:KIM)
Stock Price as of September 27: $18.16
Dividend Yield as of September 27: 4.85%
Number of Hedge Fund Holders: 19
Kimco Realty Corporation (NYSE:KIM) is a real estate investment trust (REIT) based in New York. It specializes in the ownership, management, acquisitions, and value enhancing redevelopment activities of shopping centers and owned interests in 533 U.S. shopping centers and mixed-use assets comprising 92 million square feet of gross leasable space, as of June 30, 2022.
Kimco Realty Corporation has regularly paid dividends to its shareholders for over 25 years. In July, its board of directors declared a quarterly cash dividend of $0.22 per common share, representing a 10% increase over the previous quarter.
As of September 27, Kimco Realty Corporation shares have lost 26.33% of their value year-to-date and currently trade at a forward P/E ratio of 25.01. Its shares have an average analyst price target of $24.62.
On September 27, Evercore ISI analyst Steve Sakwa lowered the price target on Kimco Realty Corporation shares to $23 from $24 and maintained an ‘Outperform’ rating.
As of Q2 2022, Kimco Realty Corporation shares were held by 19 of the 895 hedge funds tracked by Insider Monkey, valued at $125 million. Millennium Management was its biggest shareholder with ownership of 1.3 million shares valued at $25.3 million.
4. Paramount Global (NASDAQ:PARA)
Stock Price as of September 27: $19.40
Dividend Yield as of September 27: 4.95%
Number of Hedge Fund Holders: 42
Paramount Global (NASDAQ:PARA) is a leading global media and entertainment company comprising studios, networks, and streaming services, through a portfolio of brands that includes well-known names such as CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+, Pluto TV and Simon & Schuster, among others.
Earlier this year in August, Paramount Global released its financial results for the quarter ended June 30, 2022. Its total revenue increased by 19% y-o-y to $7.8 billion, while it reported a net income of $422 million, for the three months. The normalized EPS was recorded at $0.64 for the quarter, beating the consensus by $0.02.
As of September 27, Paramount Global shares have lost 35.72% of their value year-to-date and trade at a forward P/E ratio of 11.75. Analysts have an average price target of $27.70 for its shares.
As of Q2 2022, 42 of the 895 hedge funds tracked by Insider Monkey were long Paramount Global, holding shares worth $2.6 billion. Warren Buffet’s Berkshire Hathaway is its biggest shareholder.
3. Healthpeak Properties, Inc. (NYSE:PEAK)
Stock Price as of September 27: $22.80
Dividend Yield as of September 27: 5.26%
Number of Hedge Fund Holders: 28
Healthpeak Properties, Inc. is a diversified real estate investment trust (REIT) that owns and develops healthcare real estate for Life Science, Medical Office, and CCRC tenants. It has a history of regular dividend payments and has paid three quarterly dividends of $0.30 per share so far this year.
As of September 27, Healthpeak Properties, Inc. shares have lost 36.82% of their value since the beginning of the year. Nevertheless, analysts maintain an average price target of $31.62 for its shares.
On September 28, Wolf Research analyst Andrew Rosivach upgraded Healthpeak Properties, Inc. to ‘Outperform’ rating from ‘Peer Perform’ with a $27 price target on its shares.
As of Q2 2022, 28 of the 895 hedge funds tracked by Insider Monkey owned shares of Healthpeak Properties, Inc., valued at $249 million.
2. Warner Music Group Corp. (NASDAQ:WMG)
Stock Price as of September 27: $23.78
Dividend Yield as of September 27: 2.69%
Number of Hedge Fund Holders: 28
Warner Music Group Corp. is a multinational entertainment and record label company operating some of the largest and most famous labels in the world, including Atlantic, Elektra, Parlophone and Warner Records. It is also home to Warner Chappell Music – one of the world’s leading music publishers, with a catalog of more than one million copyrights.
On August 12, the board of directors of Warner Music Group Corp. declared a regular quarterly cash dividend of $0.16 per common share.
Warner Music Group Corp. has lost 44.93% of its value since the beginning of the year as of September 27 but analysts have an average price target of $33.80 for its shares.
As of Q2 2022, 28 of the 895 hedge funds tracked by Insider Monkey owned shares of Warner Music Group Corp., valued at $627 million. Darlington Partners Capital is its largest shareholder with ownership of 6.6 million shares valued at $161 million.
1. Albertsons Companies, Inc. (NYSE:ACI)
Stock Price as of September 27: $24.66
Dividend Yield as of September 27: 1.95%
Number of Hedge Fund Holders: 37
Boise, Idaho-based Albertsons Companies, Inc. is one of the largest food and drug retailers in the United States with over 2,200 stores in 34 states across the country under well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Haggen, and Carrs, among others.
As of September 27, Albertsons Companies, Inc. shares have lost 18.32% of their value year-to-date and trade at a forward P/E ratio of 8.41. Analysts have an average price target of $34.94 for its shares.
According to the Insider Monkey data on 895 leading hedge funds, 37 hedge funds were long Albertsons Companies, Inc. shares as of Q2 2022, with the total shares held by hedge funds valued at $4.7 billion. Cerberus Capital Management was the largest shareholder on record with ownership of 152 million shares valued at $3.9 billion.
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This article is originally published at Insider Monkey.
