We recently published a list of the 13 High-Dividend Stocks to Invest In Under $10. In this article, we are going to take a look at where Lloyds Banking Group plc (NYSE:LYG) stands against other high-dividend stocks under $10.
Investors often favor dividend stocks for their long-term potential, with their appeal stemming from the consistent growth they tend to deliver over time. Ed Yardeni, the President of Yardeni Research, Inc., stated the following about dividends:
“Dividends are like plants: Both grow. But dividends can grow forever, while the size of plants is limited.”
Dividend stocks are experiencing renewed interest today as a means to return value to shareholders. In 2022, companies in the broader market paid out a record $565 billion in dividends—the highest amount ever recorded. This comes at a time when interest rates are structurally higher for the first time in decades, making the era of ultra-low borrowing costs seem like a thing of the past. Between 2018 and 2022, investors also weathered three bear markets, each marked by a drop of 20% or more.
As some of the biggest companies have grown to enormous sizes —both in terms of revenue and market cap—their ability to sustain high growth rates has naturally declined. Despite slower growth prospects, these companies remain highly profitable, generating more cash than they can effectively reinvest because they are returning it to shareholders through dividends. This is why more and more companies have initiated their dividend policies. In 2024, major tech companies joined the dividend club in an effort to offer both growth and value to shareholders. The tech giants, though offering low yields today, managed to return billions through dividends last year, which is a clear indication of their strong commitment to rewarding investors.
S&P Global also highlighted this trend in a recent report, noting that global dividend growth saw a sharp rise in 2024, climbing by an impressive 8.5%. The surge was especially strong in Asia-Pacific, where government policies encouraged companies to shift from annual to semiannual dividend distributions. At the same time, the US market experienced a wave of new and reinstated dividend payments, largely fueled by companies in the technology, media, and telecommunications (TMT) sectors.
With the market taking a volatile turn, dividend stocks are in the green, offering a sense of reassurance to investors. The Dividend Aristocrats Index, which tracks the performance of companies with 25 consecutive years of dividend growth, is down by over 4% since the start of 2025, compared with an over 10% decline in the broader market. As a result, analysts remain optimistic about dividend prospects in 2025. According to S&P Global, US total dividend payouts are expected to rise by 7% next year, reaching approximately $784 billion. In recent years—and continuing into the current fiscal year—sectors like energy, pharmaceuticals, financial services, banking, and REITs have played a major role in driving this growth. Given this positive outlook, we will take a look at some of the best dividend stocks under $10 with high yields.
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Our Methodology
For this article, we screened for dividend stocks under $10, as of the close of April 7. From that list, we identified stocks with high dividend yields and picked 13 stocks with dividend yields over 4%, as recorded on April 8. The stocks are ranked according to their dividends. While high-yield dividend stocks are sometimes seen as signs of weakening financial health, we focused on selecting companies with solid dividend track records and strong balance sheets.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Lloyds Banking Group plc (NYSE:LYG)
Dividend Yield as of April 8: 4.78%
Share Price as of the Close of April 7: $3.34
Lloyds Banking Group plc (NYSE:LYG) is a British financial services company that provides services to retail and commercial customers. In FY24, the company posted an underlying net interest income of £12.8 billion, marking a 7% decline due to a reduced banking net interest margin of 2.95%, while average interest-earning banking assets remained steady at £451.2 billion. In the fourth quarter alone, underlying net interest income edged up 1% to £3.3 billion, supported by a slightly higher net interest margin of 2.97%.
Lloyds Banking Group plc (NYSE:LYG) also reported that underlying loans and advances to customers rose by £9.4 billion over the year, including a £2.1 billion increase in the fourth quarter, bringing the total to £459.1 billion. This growth was mainly driven by a £6.1 billion rise in UK mortgage lending.
In addition, customer deposits climbed by £11.3 billion over the year to reach £482.7 billion, fueled by strong growth in Retail deposits, while Commercial Banking deposits remained stable. The fourth quarter saw particularly robust momentum, with deposits increasing by £7.0 billion.
In its earnings report, Lloyds Banking Group plc (NYSE:LYG)’s management has proposed a final ordinary dividend of 2.11 pence per share, bringing the total dividend for 2024 to 3.17 pence per share. This represents a 15% increase from the previous year and aligns with the Group’s ongoing commitment to a progressive and sustainable dividend policy. With a dividend yield of 4.78%, as of April 8, LYG is one of the best dividend stocks on our list.
Overall, LYG ranks 13th on our list of the high dividend stocks to invest in under $10. While we acknowledge the potential of LYG as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than LYG but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
