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 VAALCO Energy, Inc. (NYSE:EGY) 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.
A busy oil & gas rig on the horizon, revealing the depths of the Etame Marin block’s activity.
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).
VAALCO Energy, Inc. (NYSE:EGY)
Dividend Yield as of April 8: 8.06%
Share Price as of the Close of April 7: $3.34
VAALCO Energy, Inc. (NYSE:EGY) is an American independent energy company, headquartered in Texas. The company specializes in hydrocarbon exploration. It reported mixed earnings in the fourth quarter of 2024, with revenue amounting to $121.7 million, down 18% from the same period last year. However, the revenue surpassed analysts’ estimates by $13.9 million. It posted a net profit of $11.7 million, which translates to $0.11 per diluted share, and recorded an Adjusted EBITDAX of $76.2 million.
VAALCO Energy, Inc. (NYSE:EGY) primarily operates offshore West Africa, with a key focus on the Etame Marin block off the coast of Gabon, where it has been active for over 20 years. EGY also holds assets in Equatorial Guinea and has expanded its portfolio through mergers and acquisitions. The company’s production is mainly oil, and it prioritizes low-cost, high-margin projects. It operates under production-sharing contracts and licenses, collaborating with host governments and joint venture partners.
VAALCO Energy, Inc. (NYSE:EGY)’s cash position also remained stable. The company ended the year with over $82.6 million available in cash and cash equivalents. During the year, it generated $113.7 million in operating cash flow. This sound cash availability enabled the company to return $33 million to shareholders through dividends in 2024. Moreover, its dividend and buyback distributions amounted to $83.4 million over the past two years, which makes it one of the best dividend stocks. Currently, it offers a quarterly dividend of $0.0625 per share and has a dividend yield of 8.06%, as of April 8.
Overall, EGY ranks 8th on our list of the high dividend stocks to invest in under $10. While we acknowledge the potential of EGY 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 EGY 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.
