50 Cheap Dividend Stocks to Buy in 2022 – MarketBeat

Spread the love

Sign up for MarketBeat All Access to gain access to MarketBeat’s full suite of research tools:
Looking for yield in today’s market? These cheap dividend stocks are trading within 20% of their 52-week lows and all pay a dividend yield of 3% or greater. Learn how to invest in cheap dividend stocks.
Enter your email address below to receive a concise daily summary of stocks that are about to go ex-dividend as well as new dividend announcements.
Day traders looking to make short-term trades during regular trading hours will see instant results.

Within a few minutes, you’ll know whether you’re right or wrong…

We found 5 companies that fit the ideal characteristics to maximize day trading potential…

Click Here for the Names & Ticker Symbols of All 5 Stocks. pixelpixel
The Company changed its name from CenturyLink to Lumen Technologies in 2020, the company has been shedding some of its businesses to pay down debt
Thinking about investing in General Dynamics? Learn more about the General Dynamics stock dividend yield and whether it deserves a spot in your portfolio.
The Global X NASDAQ 100 Covered Call ETF comes with a high yield and a high risk of capital erosion that could offset any profits.

Discounted prices means investors will have the opportunity to bank some nice yields on above-market dividend payers. These are a few of our favorites.
Day traders looking to make short-term trades during regular trading hours will see instant results.

Within a few minutes, you’ll know whether you’re right or wrong…

We found 5 companies that fit the ideal characteristics to maximize day trading potential…

Click Here for the Names & Ticker Symbols of All 5 Stocks.
Every investor should have some exposure to quality dividend stocks. These are stocks from companies that generate consistent revenue and earnings growth no matter what is happening in the economy. Because of this, these companies generally have strong balance sheets that feature reliable free cash flow (FCF) and a manageable debt load.
However, as is the case with any asset class, investors want to make sure they are not overpaying for dividend stocks. In this article, we’ll explain the importance of dividends and what metrics investors should use to look for cheap dividend stocks.
For those who are new to investing, let’s make sure we’re on the same page. Buying stock means taking an ownership stake in a company. Companies reward their shareholders in several ways. The way that grabs the most headlines is by increasing the value of its stock price.
Companies do this by delivering revenue and earnings that grow on a quarterly and/or annual basis. This generates interest from other investors and the stock price goes up. And if a company is still in a growth phase, the capital growth may outpace that of the broader market.
However, if a company is in a more mature phase of its business, it may not post market-beating gains. That’s where a dividend comes in. Companies that issue a dividend are distributing a percentage of its profits (known as the payout ratio) to investors as a dividend for owning the stock. Many companies pay a dividend every three months (i.e. a quarterly dividend). That means that investors earn this dividend on a regular schedule no matter what is happening with the company’s stock price.
The total return on an investment includes interest, capital gains, dividends and other distributions that an investment generates over a period of time. If a company doesn’t issue a dividend, the total return of that investment is almost exclusively limited to capital gains. These are called growth stocks.
As we explained above, when the market is going up, these stocks can outperform the market. However, when the market is in a correction or a bear market, the total return on these stocks can be significantly lower than the broader market.
By contrast, dividend stocks offer investors a dividend in addition to the opportunity for capital gains. This has a smoothing effect on many portfolios. While these stocks may not outperform the market in terms of capital gains, the dividends can help move them closer.
But these stocks really shine in times of market downturns. In this case, the stocks tend to perform “less badly” than growth stocks. In addition, the “rent” that investors collect from the dividend can help trim losses even more.
That’s because in most cases, investors have the ability to reinvest their dividends. This increases the amount of stock an investor owns which increases their capital gains as well as increasing their dividend payout. This creates a wealth-building cycle.
Strong balance sheets allow many companies to continue to pay a dividend year after year. And the best long-term dividend stocks are from companies that increase their dividend payout over a period of consecutive years.
In 2021, Hartford Funds published a study that illustrates the popularity of dividend investing. The study reports that in the last 50 years, dividends and the power of compounding from reinvesting dividends has been responsible for 84% of the total return of the S&P 500 Index. The same study found that in the last 12 years, dividends contributed approximately 17% to the total returns of the index.
Price is what you pay for a stock. Value is what the stock is worth. Experienced investors can point to many examples where one of these scenarios existed:
With that said, there are times when price and value align. By that I mean that there are times when a company’s stock price drops much lower than its intrinsic value. This creates an opportunity where investors can buy an undervalued stock at a cheap price.
One metric that analysts use to determine the value of a stock is its price-to-earnings (P/E) ratio. This is a measure of how much an investor is paying for $1 of the company’s earnings. By itself, a stock’s P/E ratio may not be the best indicator, but when put in context of the company’s sector average, investors can get a better sense of what a “correct” P/E value should be.
For example, technology stocks will tend to have a higher P/E ratio than utility stocks. However, in many cases, investors are willing to pay the higher price for the growth opportunity.
Investors should still look at an attractive P/E ratio. However, another metric specific to dividend investors is a stock’s dividend yield. A company’s dividend ratio tells an investor how much a company pays in dividends per year relative to the company’s share price. It’s expressed as a percentage.
A dividend boosts a company’s total return. When stock prices are appreciating, a dividend can help boost the performance of a stock to bring it closer to that of a growth stock. However, a reliable and preferably a growing dividend really shines when stock prices are falling. In this case, a dividend can help smooth out some of the market volatility. This is why the best dividend stocks tend to perform “less bad” in a market downturn.
The average dividend yield of stocks on the S&P 500 as of July 2022 is around 1.64%. Therefore many investors will look for a dividend yield that’s higher than this average. MarketBeat is providing a list of dividend stocks that are inexpensive based on where there stock price is relative to their 52-week highs and have a dividend yield above 3%.
Investors can typically find cheap dividend stocks when the market is going through a correction or within a bear market. When markets begin to fall, institutional investors attempt to “reprice” stocks. Frequently, they overshoot their mark.
A textbook example of this occurred at the onset of the Covid-19 pandemic in 2020. The market sold off broadly and sharply in March 2020. However, within a couple of months, investors realized that – with some notable exceptions – many stocks were significantly undervalued. This led to the broader market ripping to new highs.
And because investors are buying stocks of companies with solid dividends, there’s less concern about market timing. That’s because investors will receive a dividend regardless of what happens in the broader market.
If you want to find the absolute best of the best among the cheap dividend stocks, you’ll want to pay attention to the dividend payout. A company’s dividend yield can fluctuate daily based on the company’s current stock price. But the payout is the amount of money per share that investors will receive on an annual basis.
A dividend payout allows investors to know exactly how much income they will earn and/or reinvest. For example if a company’s payout is $4 and it pays a quarterly dividend, investors can expect to receive $1 for every share they own every quarter.
The best companies are ones that have a long history of not only continuing to pay a dividend but also to increase that payout over time. Investors can look at the company’s payout ratio to see if the company’s payout is sustainable based on its anticipated earnings.
 
Sign up for MarketBeat All Access to gain access to MarketBeat’s full suite of research tools:
View the latest news, buy/sell ratings, SEC filings and insider transactions for your stocks. Compare your portfolio performance to leading indices and get personalized stock ideas based on your portfolio.
Get daily stock ideas from top-performing Wall Street analysts. Get short term trading ideas from the MarketBeat Idea Engine. View which stocks are hot on social media with MarketBeat’s trending stocks report.
Identify stocks that meet your criteria using seven unique stock screeners. See what’s happening in the market right now with MarketBeat’s real-time news feed. Export data to Excel for your own analysis.
As Featured By:
326 E 8th St #105, Sioux Falls, SD 57103
contact@marketbeat.com
(844) 978-6257
© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer.

source

Leave a Reply

%d bloggers like this: