What if you could build wealth and purchase shares of a great, high-quality business for less than the price of lunch? Today’s article examines seven dividend stocks under $20.
But before we get straight into the list, I want to explain the value of buying and holding low-cost stocks.
When it comes to investing, especially dividend investing, many people go straight for the blue chips. They want Coca-Cola or a big, stable index fund.
That’s fine, but when you buy blue chips you’re often buying an expensive asset. And, in many cases, there’s very little room for big growth.
My favorite index fund, VYM, has gone nowhere this year. Meanwhile, Barrick Gold (which you’ll see on today’s list) surged 40% in three months. And they’re a well established company with a history of paying dividends.
(Barrick Made Huge Gains During The Trade War)
Many dividend stocks under $20 are rooted in cyclical industries. So prices rise and fall year after year.
That’s bad if you invest at the top, but it also means you’re getting a tremendous discount if you’re willing to buy the dip. Coupled with steady dividend payments and this is a fantastic opportunity for value investors.
Alright, now that you know the benefits of buying low-cost stocks, let’s examine the market:
1. Ford (F)
This is one of the most popular dividend stocks, and for good reason. Ford shares are cheap, offer reliable cash payouts, and have an annual “special dividend” which is higher than normal.
All this, plus the company’s long history, make it an attractive opportunity.
2. Invesco (IVZ)
How would you like to own a slice of a major financial institution? Well, you can!
Invesco is best known for creating and managing huge funds such as QQQ. What’s cool about this compay is how they make their money.
Invesco pays itself a small portion from each of the funds it manages, meaning that the company is turning a profit no matter how the economy is doing or what is happening in the stock market.
On top of this, Invesco shares currently yield a 6% annual dividend. This is incredibly lucrative and higher than the average company’s payout ratio.
3. BGC Partners (BGCP)
Another financial company, this one is much smaller than Invesco.
BGC helps broker deals and handle trades. They’re a financial intermediary, not a bank or hedge fund.
This has a major advantage of allowing BGC to profit off trades and transactions no matter the outcome. It makes the company somewhat safer than other financial institutions, and BGC is able to pay meatier dividends too.
You’ll earn a 12% annual dividend return at current share prices.
4. Gladstone Land (LAND)
Technically a REIT, not a stock, I’m going to include LAND on the list because you can buy it through any standard brokerage platform (including my favorite: Robinhood).
The fund invests in farms across the USA. So you’re buying into physical real estate as well as agricultural commodities.
Unlike other businesses on the list, this one is very straightforward and easy to understand. Land is finite, people need to eat, and you’re buying the supply side of both resources.
With agriculture in a slump right now, this REIT could make for a fantastic long-term investment. You’re buying a much needed asset, and earning monthly dividends on it.
5. New Residential Investment (NRZ)
Another REIT, but this one’s wildly different from Gladstone Land.
Instead of directly buying land, New Residential purchases and manages mortgages. Put another way, they help finance real estate projects.
This is slightly riskier than a standard REIT, but that’s reflected in how New Residential rewards investors. The fund currently offers a 12% dividend rate. That’s well above normal industry standards.
6. Barrick Gold (GOLD)
Gold typically inverses the general stock market.
In other words, gold goes up when stocks go down. And when precious metals prices rise, so do the profits of companies which mine them.
Perfect example: Barrick Gold.
With fears or a looming recession, Barrick’s stock has risen exponentially. And if the general market does tank, the miner’s shares will skyrocket in value.
This, coupled with dividend payouts, make Barrick Gold a stock worth considering.
7. Covanta (CVA)
There’s no business like the garbage business.
Covanta recycles waste and also incinerates trash (converting the power generated into electricity). It’s a boring, stable industrial business.
And Covanta reflects this.
The company pays a steady dividend and share prices are predicted to rise in the near future. If you’re looking for another income generating stock with growth potential, this might be it.
Closing Thoughts On The Best Dividend Stocks Under $20
($20 Buys A Lot Of Value In The Market)
Inexpensive, sub $20, stocks are a fantastic investment opportunity for everyone.
Whether you’re a new investor working with a tight budget, or someone with experience who’s looking to diversify, there’s something here to help meet your needs.
Also, if you are new to investing or have a limited budget, check out the Robinhood App. It offers free trading for millions of stocks (including all the ones on today’s list). Plus, Robinhood lets you buy and sell stocks commission free.
Best of all, you’ll get one free stock when you sign up for Robinhood using any of the referral links on this website.
Give the platform a look, I think you’ll enjoy it.
P.S. This article is meant for entertainment purposes only. Always do your own research before buying a stock, and don’t rely on this (or any) website for your investment decisions.
