Explore these bargain income investments.
If you're looking for bargain stocks, one thing is important to remember above all else: Many cheap stocks have a low price for a reason. However, some investors are reluctant to buy a stock like Amazon.com (ticker: AMZN) that costs more than $2,800 for a single share. They would rather buy a company with a low nominal price that they can purchase in large quantities instead of scooping up just a handful of shares. The following nine dividend stocks all offer share prices under $10 a piece to accommodate this strategy; however, investors should be aware that this often comes with some trade-offs -- such as low growth prospects or less frequent payouts. Still, if you're interested in cheap dividend payers trading for less than $10 as of yesterday's market close, here are nine dividend stocks to consider.
Annaly Capital Management (NLY)
A diversified capital manager, Annaly Capital Management invests in residential and commercial assets primarily through mortgage-backed debt and similar securities. The stock took a big hit earlier this year on pandemic fears, but it has since stabilized after a decent bounce back from its March lows. And while NLY dividends fluctuate from quarter to quarter, and admittedly have drifted slightly lower lately, investors can rely on the massive portfolio of real estate investments to keep generating a decent flow of cash. Based on the last year of payouts, totaling 97 cents, the current yield is among the highest on Wall Street.
Current yield: 15%
Antero Midstream Corp. (AM)
Though energy prices have been volatile lately and many related stocks have also been choppy as a result, Antero is a "midstream" firm that is focused more on storage and transportation. Specifically, AM owns and operates natural gas gathering pipelines, compression stations and processing facilities, primarily around the Marcellus Shale and Utica Shale basins, that are popular among U.S. fracking firms. There are concerns future payouts may be slightly reduced, but given its current massive yield, even a modest reduction would still deliver significant income potential.
Current yield: 24.2%
ASE Technology (ASX)
ASE is a Taiwan-based technology company that provides a range of semiconductor services including packaging, testing and manufacturing. This is not a company that has proprietary chip designs, but rather a foundry that takes orders from third parties who don't have their own facilities or the desire to run manufacturing operations. Admittedly, ASX stock only pays its dividends once a year, but that payday is in August -- so the time is right to consider buying in. And based on last year's payday, the yield is more than the average payout of about 2% for the typical stock in the S&P 500 index of large-cap U.S. stocks.
Current yield: 2.4%
Despite a dividend cut in 2018, second-tier U.S. telecom company CenturyLink is now paying a 25-cent quarterly dividend per share like clockwork. And more importantly, in the age of a global pandemic, this stock has gotten a bit of a shot in the arm because it is seen as essential infrastructure by both its customers and by the regulatory and business community. There is long-term risk as operations aren't strong enough for CTL to invest in upgrading its network to 5G technology -- the next-generation network -- or finding significant growth opportunities. However, if you're looking for a cheap stock with a double-digit yield, CTL is worth a look.
Current yield: 10.5%
Enel Chile (ENIC)
Based in Santiago, Chile, Enel is a utility company that transmits and distributes electricity in 33 municipalities. It may be a foreign company you've never heard of, but ENIC is on par with many regional U.S. utilities with its $5 billion market capitalization and extensive operations that span hydroelectric dams, wind farms and dozens of other facilities that serve about 2 million total customers. Like many overseas stocks, it doesn't follow the strict quarterly payout regimen of domestic dividend payers. However, ENIC's biannual dividend adds up to roughtly 25 cents over the last year, which works out to a more generous payday than what most American utility stocks offer.
Current yield: 6.4%
KT Corp. (KT)
South Korea-based KT Corp., previously known as Korea Telecom, provides voice and internet communications services. On top of 22 million mobile subscribers and more than 8 million television subscribers, it also provides digital music streaming services, online-shopping platforms, digital content distribution and a host of other related services to the region. Communications in Asia are just as vital as those provided in the U.S. by big telecom names, so KT has a reliable business to lean on. It only pays dividends once a year; however, that December payday adds up to a generous income stream over time.
Current yield: 3.8%
Nomura Holdings (NMR)
Nomura is a Toyko-based financial firm that offers retail banking, business lending and asset management. One of the smaller global banks with less than $14 billion in market capitalization, Nomura is an interesting stock. It has the more sophisticated model of the megabanks you might be familiar with, but its modest scale and local focus are similar to community and regional banks here in the U.S. that are closer to its size. NMR pays dividends twice a year, in March and September, but its last two payouts of 15.5 cents add up to a nice annual yield based on current pricing.
Current yield: 3.4%
Over a century old, London-based Pearson is one of the largest providers of educational products and services in the world -- operating in 70 countries. Its business includes traditional courseware like textbooks, along with test development services, grading platforms and online learning tools. Pearson has grown into the largest digital learning company by revenue, which is important to note as the pandemic has disrupted traditional learning. PSO products are used by every level of the education system, from elementary school to universities. Needless to say, the demand for schooling is constant, so the cash flow to Pearson is reliable, too -- fueling the company's generous biannual dividends.
Current yield: 3.4%
United Microelectronics Corp. (UMC)
Though it only pays a dividend once a year, the good news is that UMC's next ex-dividend date -- the date before which you must own shares in order to be eligible for the next payout -- is July 14. That means you have time to get into this cheap dividend stock now and get paid, with the option of selling out and buying back in later if you don't want to hang on beyond the distribution. UMC doesn't have much in the way of profits, as it doesn't develop internally designed chips but is instead reliant on third-party business. That said, it may be worth keeping as a longer-term holding as its 2020 revenue estimates are expected to be up roughly 12% over the prior year.
Current yield: 2.5%
Nine cheap dividend stocks to consider:
-- Annaly Capital Management (NLY)
-- Antero Midstream Corp. (AM)
-- ASE Technology (ASX)
-- CenturyLink (CTL)
-- Enel Chile (ENIC)
-- KT Corp. (KT)
-- Nomura Holdings (NMR)
-- Pearson (PSO)
-- United Microelectronics Corp. (UMC)
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