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2 Cheap Dividend Stocks You Can Buy Right Now

Rick Munarriz, The Motley Fool

The recent market sell-off stings, but it's also creating some pretty tempting buying opportunities. Throw in a dividend -- pushing the yield higher as the stock moves lower -- and you have a lot of cheap stocks vying for space in your hungry portfolio.

Royal Caribbean (NYSE: RCL) and American Express (NYSE: AXP) are two stocks that fit the bill. They both pay modest quarterly distributions, but they're also growing, trade at low forward earnings multiples, and have consistently beaten Wall Street profit targets over the past year. Let's take a closer look at these two cheap dividend stocks that you can buy right now.

Royal Caribbean's Anthem ship sailing into the sunset.

Image source: Royal Caribbean.

Setting sail with Royal Caribbean on sale

The world's second-largest cruise line is stuck in a dry dock. Royal Caribbean hit 52-week lows last month, taking on water after delivering mixed third-quarter results. It's not a lack of growth that's holding it back. Revenue rose 9% in its latest quarter, its headiest growth in more than six years. Adjusted net income rose 11%, beating Wall Street targets just as Royal Caribbean has over the past year. 

Carnival (NYSE: CCL) (NYSE: CUK) is larger, packing a higher yield to boot. Carnival is also 4-for-4 in exceeding analyst earnings expectations. However, it is growing slower than the silver medalist. Royal Caribbean and Carnival cleared the hurdles I set in screening for cheap payout providers, but Royal Caribbean gets the nod here as the compelling value relative to its expected growth.

Company 2018 P/E 2019 P/E Yield
Carnival 13.9 12.6 3.4%
Royal Caribbean 12.0 10.8 2.6%

Data source: Yahoo! Finance.

Bookings for future sailings are running strong for the industry. Carnival and Royal Caribbean should continue to benefit from broader acceptance and interest in cruise ship vacations. The seas may seem rough now, but there's a lot of ocean left to conquer when the waves settle down.

Taking charge with American Express

The economy's booming, and that would seem to be a dinner bell for American Express on all fronts. Unemployment rates near historic lows and rising take-home pay are making consumers more comfortable in shopping, and the news is even more encouraging on the enterprise front where American Express is a juggernaut of business cards and financing products. 

Diluted earnings per share soared 25% in Amex's latest quarter, fueled by increased spending and loan growth along with the improving creditworthiness of its accounts. American Express is killing it with its signature credit and charge cards, and it's in the process of updating its consumer and corporate gold cards packing more features into the products as a way to justify its boosted annual fees. 

Unlike Royal Caribbean, American Express isn't out of favor. The stock is a few ticks away from taking out the all-time highs it hit less than two months ago. Its yield of 1.5% also isn't going to make jaws drop. However, it's still a bargain at 14.5 times this year's projected earnings and 13.2 times next year's analyst target.  

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Rick Munarriz owns shares of American Express and Royal Caribbean. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.