The Best Dividend-Paying Stocks Under $20 - Hidden Gems for 2024

Written By Ben Broadwater

Posted December 22, 2023

In the whirlwind of market headlines and flashy tech giants, it’s easy to overlook the quiet allure of the best dividend-paying stocks under $20. These hidden gems, often nestled among established companies and lesser-known sectors, offer a double dose of delight: the potential for capital appreciation and, more importantly, a steady stream of passive income through regular dividend payouts. In this article, we’ll demystify the world of dividend investing and unveil some shining examples of affordable dividend heroes poised to enrich your portfolio.

But first, what exactly is dividend investing? Simply put, it’s the strategy of buying and holding stocks that regularly distribute a portion of their profits to shareholders in the form of cash dividends. These payouts can be quarterly, monthly, weekly, or even annually, providing a reliable income stream alongside potential capital growth. Unlike chasing volatile growth stocks, dividend investing focuses on established companies with strong financial track records and a commitment to rewarding shareholders.

best dividend-paying stocks under $20

Why Consider The Best Dividend-Paying Stocks Under $20?

The benefits include:

  • Affordability: These stocks offer an accessible entry point for both new and experienced investors, allowing you to build a diversified portfolio without breaking the bank.
  • Compounded Growth: Regular dividends, when reinvested, benefit from the power of compounding, potentially snowballing your portfolio over time.
  • Income Generation: Whether you’re targeting supplemental income or building towards retirement, these stocks provide a reliable source of cash flow.
  • Hedging Against Volatility: During market downturns, steady dividend payouts can help offset losses and provide a sense of stability in your portfolio.

Navigating the Gemstone Field: Tips for Finding The Best Dividend-Paying Stocks Under $20

With so many options available, unearthing the truly golden dividend stocks requires a discerning eye. Here are some key factors to consider:

  • Dividend Yield: This metric, expressed as a percentage of the stock price, shows the annual payout relative to the investment cost. While a high yield might be tempting, prioritize the sustainability of the dividend over chasing the biggest number.
  • Financial Health: Scrutinize the company’s financials, including debt levels, profitability, and cash flow. Strong fundamentals ensure the company can maintain its dividend payments even during challenging times.
  • Growth Potential: Don’t just focus on present payouts; consider the company’s future prospects. A proven track record of dividend increases and potential for organic growth bodes well for long-term returns.
  • Diversification: Spread your bets across different sectors and industries to mitigate risk. Owning a variety of best dividend-paying stocks under $20 helps weather market fluctuations and ensures steady income even if one company stumbles.

4 Dividend-Paying Stocks Under $20

1. Urstadt Biddle Properties (NYSE: UBA): Anchored in Value

best dividend-paying stocks under $20 - UBA

Nestled in the bustling streets of New York City and beyond, Urstadt Biddle Properties owns and operates community shopping centers anchored by grocery stores. This REIT boasts a stable 4.1% dividend yield and a laser focus on essential needs. While facing a potential acquisition this year, UBA offers reliable dividends until then.

2. First Horizon Corporation (NYSE: FHN): Regional Banking with High Yield Potential

best dividend-paying stocks under $20 - FHN

This regional bank holding company, operating primarily in the Southeastern US, offers a tempting 5.7% dividend yield. While regional banks carry inherent risk, FHN’s strong financial performance and focus on core operations make it worth considering.

3. Ladder Capital Corp. (NYSE: LADR): Mortgage Powerhouse with High Yield

best dividend-paying stocks under $20 - LADR

This mortgage real estate investment trust (mREIT) focuses on originating and investing in senior secured loans, offering a hefty 11.3% yield. Remember, high yields often come with higher risk, so thorough research is crucial before diving into mREITs like LADR.

 

4. Orange SA (NYSE: ORAN): French Telecom Titan with Global Reach

best dividend-paying stocks under $20 - ORAN

This diversified French telecom giant might not be a household name, but it packs a punch. Orange operates across Europe, Africa, and the Middle East, offering a geographically diverse revenue stream. Its 5.6% dividend yield, coupled with recent revenue growth, makes it a compelling option for those seeking international exposure.

The Best Dividend-Paying Stocks Under $20 – Final Thoughts

While these stocks offer enticing yields, remember, investing requires due diligence. Consider factors like financial health, debt levels, and future growth prospects before making any decisions. Diversification is also crucial. Don’t put all your eggs in one basket – spread your investments across different sectors and risks.

This list is just a starting point on your dividend-seeking journey. Explore, research, and find the hidden gems that align with your investment goals. Remember, patience and discipline are your allies in the market. So, happy hunting, and may your portfolio flourish with the steady drip of dividends!

I hope this article provides a valuable starting point for your research into dividend-paying stocks under $20! Good luck on your investment journey.

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