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10 Cheap Blue-Chip Dividend Stocks to Invest In

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·10 min read
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In this article, we will be taking a look at 10 cheap blue-chip dividend stocks to invest in. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Cheap Blue-Chip Dividend Stocks to Invest In.

Any investor looking for reliable and somewhat safer investments out in the market will at some point in their life consider investing in blue-chip stocks like McDonald's Corporation (NYSE: MCD), Intel Corporation (NASDAQ: INTC), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT). Such a thought process is also justifiable, given the exceptional market caps and reputations of these companies. Such reputations often result in higher investor trust, and thus the tendency for many to gravitate towards blue-chip stocks, and blue-chip dividend stocks, for the attractive returns, financial stability, and consistent payouts they often promise.

Such stocks often benefit from a range of things, apart from just their reputation. For instance, blue-chip stocks will tend to have the financial stability necessary for continued dividend payouts over larger time periods, resulting in many members of the dividend aristocrats, champions, or kings being traditional blue-chip stocks. Such stocks will also be likelier to have sustainable revenue growth, allowing them to maintain dividend growth trends, to continue. This one factor, when taken into account, can also show how blue-chip stocks may be better than others on the market. For instance, Oppenheimer Funds estimated in a report published in 2014 that between 1972 and 2013, dividend stocks that were able to grow their dividend payouts because of better revenue growth, outperformed those that did not grow their payouts by about 2.4% annually during the time period studied.

These stocks are typically performing well so far in 2021 as well, even if you take a look at European blue-chip stocks represented by the pan-European STOXX 600 index. This index rose by about 0.7% near the end of July, while travel and leisure stocks in the blue-chip category gained about 3.2% during the same time, according to a Reuter's report from July. As such, blue-chip dividend stocks can often be considered attractive investment options for those looking for long-term stability and sustainability in their portfolios.

Photo by Viacheslav Bublyk on Unsplash

Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Without further ado, let's take a look at the 10 cheap blue-chip dividend stocks to invest in.

Our Methodology

We have selected blue-chip dividend stocks with share prices of about $20 and under for our list below. Insider Monkey tracks the data of about 873 hedge funds, and we have also used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield, share price, and the number of hedge funds holding stakes in it, ranking the stocks from the lowest to the highest yield. Finally, we have used analysts' ratings to determine which stocks are favorably placed in analyst and investor circles, picking stocks with mostly positive ratings and strong fundamentals.

Cheap Blue-Chip Dividend Stocks to Invest In

10. Horizon Bancorp, Inc. (NASDAQ: HBNC)

Number of Hedge Fund Holders: 10 Dividend Yield: 2.88%

Share Price as of August 25: $18.06

Horizon Bancorp, Inc. (NASDAQ: HBNC), the bank holding company for Horizon Bank, offers a range of financial services and products like demand and time deposits, and consumer loans. The company ranks 10th on our list of cheap blue-chip dividend stocks to invest in, and also provides corporate and individual trust and agency, investment management, and real estate investment trust services, among others.

In the second quarter of 2021, Horizon Bancorp, Inc. (NASDAQ: HBNC) had an EPS of $0.50, beating estimates by $0.07. The company's revenue was $57.84 million, up 6.87% year over year and beating estimates by $1.01 million. Horizon Bancorp, Inc. (NASDAQ: HBNC) has gained 17.04% year to date and 62.12% in the past year.

By the end of the second quarter of 2021, 10 hedge funds out of the 873 tracked by Insider Monkey held stakes in Horizon Bancorp, Inc. (NASDAQ: HBNC) worth roughly $13 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $13.5 million.

Like McDonald's Corporation (NYSE: MCD), Intel Corporation (NASDAQ: INTC), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), Horizon Bancorp, Inc. (NASDAQ: HBNC) is a good stock to invest in.

9. Holly Energy Partners, L.P. (NYSE: HEP)

Number of Hedge Fund Holders: 3 Dividend Yield: 7%

Share Price as of August 25: $18.15

Holly Energy Partners, L.P. (NYSE: HEP) is a crude oil pipeline transportation company that owns and operates petroleum product and crude pipelines, storage tanks, distribution terminals, rack facilities, and refinery processing units. The company operates through its Pipelines and Terminals, and Refinery Processing Units segments. It ranks 9th on our list of cheap blue-chip dividend stocks to invest in.

As of this May, Wells Fargo holds an Equal Weight rating on shares of Holly Energy Partners, L.P. (NYSE: HEP). Analyst Michael Blum also raised his price target on the stock to $21.

In the second quarter of 2021, Holly Energy Partners, L.P. (NYSE: HEP) had an EPS of $0.53, beating estimates by $0.06. The company's revenue was $126.23 million, up 9.95% year over year but missing estimates by $1.91 million. Holly Energy Partners, L.P. (NYSE: HEP) has gained 4.67% in the past 6 months and 32.19% year to date.

By the end of the second quarter of 2021, 3 hedge funds out of the 873 tracked by Insider Monkey held stakes in Holly Energy Partners, L.P. (NYSE: HEP) worth roughly $4.4 million. This is compared to 2 hedge funds in the previous quarter with a total stake value of approximately $3.6 million.

Like McDonald's Corporation (NYSE: MCD), Intel Corporation (NASDAQ: INTC), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), Holly Energy Partners, L.P. (NYSE: HEP) is a good stock to invest in.

8. Lakeland Bancorp, Inc. (NASDAQ: LBAI)

Number of Hedge Fund Holders: 13 Dividend Yield: 3.3%

Share Price as of August 25: $16.42

Lakeland Bancorp, Inc. (NASDAQ: LBAI), the bank holding company for Lakeland Bank, is next on our list of cheap blue-chip dividend stocks to invest in. The company offers banking products and services for individual customers and small and medium-sized businesses. It ranks 8th on our list.

William Wallace, an analyst at Raymond James, upgraded shares of Lakeland Bancorp, Inc. (NASDAQ: LBAI) this April from Outperform to Strong Buy. The analyst also raised his price target on the shares from $17 to $23.

In the second quarter of 2021, Lakeland Bancorp, Inc. (NASDAQ: LBAI) had an EPS of $0.53, beating estimates by $0.10. The company's revenue was $65.01 million, up 16.09% year over year and beating estimates by $0.43 million. Lakeland Bancorp, Inc. (NASDAQ: LBAI) has gained 1.67% in the past 6 months and 30.01% year to date.

By the end of the second quarter of 2021, 13 hedge funds out of the 873 tracked by Insider Monkey held stakes in Lakeland Bancorp, Inc. (NASDAQ: LBAI) worth roughly $33 million. This is compared to 14 hedge funds in the previous quarter with a total stake value of approximately $37 million.

Like McDonald's Corporation (NYSE: MCD), Intel Corporation (NASDAQ: INTC), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), Lakeland Bancorp, Inc. (NASDAQ: LBAI) is a good stock to invest in.

7. Resources Connection, Inc. (NASDAQ: RGP)

Number of Hedge Fund Holders: 12 Forward Dividend Yield: 3.5%

Share Price as of August 25: $15.84

Resources Connection, Inc. (NASDAQ: RGP) is an industrials company that offers consulting services to businesses under the Resources Global Professionals name. The company operates in North America, Europe, and the Asia Pacific, and ranks 7th on our list of cheap blue-chip dividend stocks to invest in.

In the fiscal fourth quarter of 2021, Resources Connection, Inc. (NASDAQ: RGP) had an EPS of $0.80, beating estimates by $0.58. The company's revenue was $172.32 million, also beating estimates by $6.63 million. Resources Connection, Inc. (NASDAQ: RGP) has gained 22.32% in the past 6 months and 27.64% year to date.

By the end of the second quarter of 2021, 12 hedge funds out of the 873 tracked by Insider Monkey held stakes in Resources Connection, Inc. (NASDAQ: RGP) worth roughly $30 million. This is compared to 11 hedge funds in the previous quarter with a total stake value of approximately $34.3 million.

Like McDonald's Corporation (NYSE: MCD), Intel Corporation (NASDAQ: INTC), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), Resources Connection, Inc. (NASDAQ: RGP) is a good stock to invest in.

6. Telephone and Data Systems, Inc. (NYSE: TDS)

Number of Hedge Fund Holders: 18 Dividend Yield: 3.5%

Share Price as of August 25: $20.01

Telephone and Data Systems, Inc. (NYSE: TDS) is a telecommunications company and ranks 6th on our list of cheap blue-chip dividend stocks to invest in. The company operates through its cellular, Wireline, and Cable segments to provide communications services in the US.

This May, Citigroup analyst Michael Rollins raised his price target on shares of Telephone and Data Systems, Inc. (NYSE: TDS) from $27 to $29. The analyst also reiterated a Buy rating on the shares.

In the second quarter of 2021, Telephone and Data Systems, Inc. (NYSE: TDS) had an EPS of $0.17, missing estimates by $0.04. The company's revenue was $1.31 billion, up 3.8% year over year and beating estimates by $4.64 million. Telephone and Data Systems, Inc. (NYSE: TDS) has gained 10.37% in the past 6 months and 6.78% year to date.

By the end of the second quarter of 2021, 18 hedge funds out of the 873 tracked by Insider Monkey held stakes in Telephone and Data Systems, Inc. (NYSE: TDS) worth roughly $160 million. This is compared to 20 hedge funds in the previous quarter with a total stake value of approximately $253 million.

Like McDonald's Corporation (NYSE: MCD), Intel Corporation (NASDAQ: INTC), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), Telephone and Data Systems, Inc. (NYSE: TDS) is a good stock to invest in.

Click to continue reading and see the 5 Cheap Blue-Chip Dividend Stocks to Invest In.

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Disclosure: None. 10 Cheap Blue-Chip Dividend Stocks to Invest In is originally published on Insider Monkey.