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10 Cheap Dividend Stocks to Buy Today

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·8 min read
In this article:
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In this article, we discuss 10 cheap dividend stocks to consider. If you want to see some more stocks in this selection, click 5 Cheap Dividend Stocks to Buy Today.

In this uncertain market, with inflation reaching all-time highs, the Russia-Ukraine conflict, surging prices of oil and commodities, and a global food crisis on the horizon, the stock market has been extremely volatile. The market delivered its first correction in two years, wiping out the gains of the post-pandemic recovery of 2021. The S&P 500 Index had fallen 12% year-to-date by the end of February.

Dividend Payouts in 2022

Dividends in 2021 had reached a record high of $1.47 trillion, and according to Janus Henderson on February 28, 2022 is forecasted to deliver global dividends of $1.52 trillion. While 2021 represented an increase of 14.7% in dividend payments as compared to the dividend cuts in 2020, this year the dividend growth will only reach 5.7% on an underlying basis.

Savita Subramanian, the head of equity and quantitative strategy at BofA Securities, said on March 28 that due to excessive globalization, S&P 500 constituents have been hit pretty hard due to the Russia-Ukraine war, and the conflict has impacted nearly everyone around the world. For this reason, her firm is bullish on domestic small-cap stocks with less exposure to the geopolitical tensions. She believes small-caps are trading at a 26% discount relative to the large-caps, and her top picks are the financials and energy stocks in this market.

Subramanian also highlighted the role of dividends in this market. For traders who see negative or minimum returns on share prices, dividend returns will make up a bigger portion of the total returns in a portfolio. She likes financial companies for dividends, given their strong cash flows and their focus on dividends rather than share buybacks.

While S&P 500 constituents like Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Altria Group, Inc. (NYSE:MO) are prominent dividend payers, the focus in this article would be cheap dividend stocks.

Photo by Artem Beliaikin on Unsplash

Our Methodology

We screened for cheap dividend stocks, priced under $20 as of March 28. These stocks have dividend yields of more than 4%. Data from 900+ elite hedge funds tracked by Insider Monkey at the end of December 2021 was used to identify the number of hedge funds that hold stakes in each firm.

10. Eagle Point Income Company Inc. (NYSE:EIC)

Number of Hedge Fund Holders: 1

Share Price as of March 28: $16.47

Dividend Yield as of March 28: 9.11%

Eagle Point Income Company Inc. (NYSE:EIC) is a closed-end investment company that seeks capital appreciation by investing mainly in collateralized loan obligations. The company aims to outperform the broader CLO market in the long-term.

On February 14, Eagle Point Income Company Inc. (NYSE:EIC) declared a $0.125 per share monthly dividend, a 4.2% increase from its prior dividend of $0.120. The dividend is payable on April 29 to shareholders of record on April 11. The company’s Q4 net investment income and realized capital gains came in at $0.14 per weighted average common share on February 17.

According to the fourth quarter database of Insider Monkey, Eagle Point Income Company Inc. (NYSE:EIC) was found in the portfolio of one hedge fund, with stakes worth $329,000.

In addition to Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Altria Group, Inc. (NYSE:MO), Eagle Point Income Company Inc. (NYSE:EIC) is a notable dividend payer.

9. OFS Capital Corporation (NASDAQ:OFS)

Number of Hedge Fund Holders: 2

Share Price as of March 28: $12.66

Dividend Yield as of March 28: 8.85%

OFS Capital Corporation (NASDAQ:OFS) is a business development company that specializes in direct investments and corporate acquisitions. The company provides capital solutions via debt capital and equity investments, offering financing to American middle market companies from various industries.

OFS Capital Corporation (NASDAQ:OFS) published its fourth quarter results on March 4. The company posted earnings per share of $0.33, exceeding market consensus estimates by $0.09. Revenue over the period jumped 37.08% year-over-year to $15.27 million, outperforming analysts’ predictions by $4.10 million.

On March 4, OFS Capital Corporation (NASDAQ:OFS) declared a $0.28 per share quarterly dividend, a 12% increase from its earlier dividend of $0.25. The dividend will be paid on March 31, to shareholders of the company as of March 24. The stock’s dividend yield on March 28 came in at 8.85%.

According to the Q4 database of Insider Monkey, 2 hedge funds were bullish on OFS Capital Corporation (NASDAQ:OFS), compared to 1 fund in the prior quarter. The total stakes held in the fourth quarter amounted to $778,000. Israel Englander’s Millennium Management held the leading stake in the company, with 38,848 shares worth $423,000.

8. PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT)

Number of Hedge Fund Holders: 3

Share Price as of March 28: $13.51

Dividend Yield as of March 28: 8.44%

PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) is a business development company that deals in debt, equity, and loan investments. The company primarily invests in small-cap and middle market companies via floating rate loans.

Publishing its fourth quarter results on February 9, PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) announced earnings per share of $0.33, topping market consensus by $0.05. The revenue increased 27% from the prior-year quarter to $26.34 million, outperforming estimates by $5.07 million.

On March 2, PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) declared a $0.095 per share monthly dividend, in line with previous. The dividend is payable on April 11, to shareholders of record on March 17. The stock yields 8.44% as of March 28.

According to Insider Monkey’s Q4 data, 3 hedge funds placed long bets on PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT), with combined stakes of $5 million, compared to 4 funds in the prior quarter, holding stakes in PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) worth approximately $6 million. John Overdeck and David Siegel’s Two Sigma Advisors is the biggest shareholder of the company, with 283,675 shares worth $3.6 million.

7. SLR Senior Investment Corp. (NASDAQ:SUNS)

Number of Hedge Fund Holders: 3

Share Price as of March 28: $14

Dividend Yield as of March 28: 8.57%

SLR Senior Investment Corp. (NASDAQ:SUNS) is an American business development company that invests in leveraged buyouts, acquisitions, recapitalizations, growth capital, and general refinancing across private US middle-market companies. On March 1, SLR Senior Investment Corp. (NASDAQ:SUNS)’s FY21 non-GAAP NII of $0.94 exceeded estimates by $0.01.

On March 16, SLR Senior Investment Corp. (NASDAQ:SUNS) announced a $0.10 per share monthly dividend. The dividend will be distributed on April 1, to shareholders of record on March 18. SLR Senior Investment Corp. (NASDAQ:SUNS)’s dividend yield on March 28 came in at 8.57%.

SLR Senior Investment Corp. (NASDAQ:SUNS) and SLR Investment Corp. (NASDAQ:SLRC) on March 21 announced shareholder approval for the merger of the companies. The transaction will conclude on April 1, subject to closing conditions.

Among the hedge funds tracked by Insider Monkey, 3 hedge funds disclosed long positions in SLR Senior Investment Corp. (NASDAQ:SUNS) at the end of December 2021, compared to 1 fund in the earlier quarter. The total stakes owned in Q4 amounted to $1.73 million.

6. First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD)

Number of Hedge Fund Holders: 4

Share Price as of March 28: $4.28

Dividend Yield as of March 28: 9.35%

First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) is a Boston-based business development company that focuses on direct and fund of fund investments. First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) invests in debt and equity securities of middle market companies.

On March 3, First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) declared a quarterly per share dividend of $0.10 per share. The dividend is payable on March 31, for shareholders of record on March 15. First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD)’s dividend yield on March 28 stood at 9.35%.

Among the hedge funds tracked by Insider Monkey, 4 hedge funds were bullish on First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) at the end of December 2021, compared to 5 funds in the prior quarter. Billionaire Leon Cooperman’s Omega Advisors is the largest stakeholder of the company, with 2.1 million shares worth $9.7 million.

First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) is a cheap dividend stock to consider for an income portfolio composed of securities like Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Altria Group, Inc. (NYSE:MO).

Click to continue reading and see 5 Cheap Dividend Stocks to Buy Today.

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Disclosure: None. 10 Cheap Dividend Stocks to Buy Today is originally published on Insider Monkey.