As we head into the home stretch of 2024, the playbook for growth investors is the same as one year ago. You're looking at technology stocks, particularly artificial intelligence (AI) stocks and maybe some weight loss drug stocks such as Eli Lilly and Co. (NYSE: LLY).
But what if you're a value and income investor? Dividend-paying stocks are solid choices because of how they help mitigate volatility. And there's something to be said for receiving regular dividend payments. But investors still want growth. Over the last five years, the average total return of dividend-paying stocks that are part of the S&P 500 has been 10.08%. That's nice, but it doesn't match the performance of NVIDIA Corp. (NASDAQ: NVDA).
However, with increasing evidence of sector rotation, institutional money is starting to flow into sectors more favorable to dividend investors. In this special presentation, we're looking at seven dividend stocks that still have a price under $50.
Quick Links
- Bank of America
- Bristol-Myers Squibb
- AngloGold Ashanti
- Kenvue
- Nintendo
- Fortescue
- Kinder Morgan
#1 - Bank of America (NYSE:BAC)
Leading off this list of attractive dividend stocks under $50 is Bank of America (NYSE: BAC). Financial stocks are expected to get a boost from looser monetary policy. This is why many investors may be confused by Warren Buffett’s decision to dump a significant amount of BAC shares in late July.
However, every investor, even Warren Buffett, has many reasons to sell a stock. And Buffett’s hedge fund, Berkshire Hathaway Inc. (NYSE: BRK.B), still owns over 940 million BAC shares, which is over 12% of the shares outstanding.
And there are good reasons for that. Bank of America remains one of the nation’s healthiest banks despite underperforming, but passing, the last round of the Federal Reserve’s stress tests. Ironically, the tests showed that BAC may have to increase its cash buffer at the expense of dividends and buybacks. Yet, in its most recent quarter, the bank increased its dividend by 8% and the board of directors authorized a new $25 billion stock buyback program that became effective August 1, 2024.
About Bank of America
Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets.
Read More - Current Price
- $39.45
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $42.22 (7.0% Upside)
#2 - Bristol-Myers Squibb (NYSE:BMY)
One Warren Buffett stock deserves another, which brings us to Bristol-Myers Squibb Inc. (NYSE: BMY). BMY stock is down 5.8% in 2024. The company faces concerns about declining revenue from its flagship oncology drug, Reylimid, which was down 39% in the company’s last earnings report. BMY also has two other major drugs, Eliquis and Opdivo, that will go over the patent cliff in 2026 and 2028, respectively.
However, the company has used debt effectively to make strategic acquisitions to beef up the pipeline. Those investments may pay off shortly, with a schizophrenia drug expected to be approved by the FDA sometime in 2024.
That may be putting the focus back on growth. The Bristol-Myers Squibb analyst forecasts on MarketBeat give BMY a consensus Hold rating. However, BMY stock has climbed over 19% in the past month. Investors also get an attractive dividend which has a yield of 4.95%. The company has raised that dividend in each of the last 16 consecutive years.
About Bristol-Myers Squibb
Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases. The company's products include Eliquis for reduction in risk of stroke/systemic embolism in non-valvular atrial fibrillation, and for the treatment of DVT/PE; Opdivo for various anti-cancer indications, including bladder, blood, CRC, head and neck, RCC, HCC, lung, melanoma, MPM, stomach and esophageal cancer; Pomalyst/Imnovid for multiple myeloma; Orencia for active rheumatoid arthritis and psoriatic arthritis; and Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia.
Read More - Current Price
- $50.95
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 13 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $55.00 (7.9% Upside)
#3 - AngloGold Ashanti (NYSE:AU)
Gold enthusiasts are often dismissed as the broken clocks that are right twice a day. This may be one of those times. The spot price of gold is over $2,400 as of August 14, 2024, and it’s up more than 18% this year. Central banks all over the world continue to buy gold. There could be many reasons for this, but expectations for a rate cut that will devalue the U.S. dollar can’t be overlooked.
That’s why you may want to consider a position in AngloGold Ashanti plc (NYSE: AU). The company is a gold miner with operations in Africa, Australia, and the Americas. AU stock is up an impressive 64% in 2024, which could lead to concerns that any growth is priced in.
However, the company reiterated its full-year production guidance with its strong second-quarter earnings report. And analysts are beginning to raise their price targets accordingly. At that time, the company raised its dividend by 15%.
About AngloGold Ashanti
AngloGold Ashanti plc operates as a gold mining company in Africa, Australia, and the Americas. The company primarily explores for gold, as well as produces silver and sulphuric acid as by-products. Its flagship property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania.
Read More - Current Price
- $28.76
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 2 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $28.50 (0.9% Downside)
#4 - Kenvue (NYSE:KVUE)
Consumer staples stocks have started to benefit from sector rotation. Kenvue Inc. (NYSE: KVUE) is a good example. The stock is about at the breakeven point for the year, but it’s had a strong rally in the month ending August 14, 2024.
The Johnson & Johnson (NYSE: JNJ) spinoff houses JNJ’s legacy consumer health products. That generally gives the company defensive characteristics, but it has been a double-edged sword as consumers opt for house brands to stave off inflation.
If an interest rate cut happens in September, the consumer won’t feel it for several quarters. But the market always looks ahead, and that’s why Kenvue and its stable of well-respected brands is generating interest.
The stock is trading in the middle of its 52-week range and has a consensus Hold from analysts. However, recent price targets are moving higher. And even though Kenvue is a “new company,” it inherits the dividend history of JNJ. That means it’s a dividend king that just increased its dividend.
About Kenvue
Kenvue Inc operates as a consumer health company worldwide. The company operates through three segments: Self Care, Skin Health and Beauty, and Essential Health. The Self Care segment offers cough, cold and allergy, pain care, digestive health, smoking cessation, eye care, and other products under the Tylenol, Motrin, Benadryl, Nicorette, Zarbee's, ORSLTM, Rhinocort, Calpol, and Zyrtec brands.
Read More - Current Price
- $23.11
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $22.10 (4.4% Downside)
#5 - Nintendo (OTCMKTS:NTDOY)
Roaring Kitty made GameStop Corp. (NYSE: GME) relevant again in 2024. But if you’re looking to put money into a gaming stock, Nintendo Co. (OTCMKTS: NTDOY) is the one to consider.
NTDOY stock is down about 10% in the last six months after the company announced it was delaying the launch of its next-generation Switch console until 2025. The current switch console is over seven years old, and investors were banking on a strong refresh cycle during the all-important holiday season.
Nevertheless, the company’s financials continue to be strong even in the face of declining year-over-year revenue. As testament to that, the company’s profit margin increased by almost 1% in the last quarter.
If you’re looking to get ahead of the curve, shares of NTDOY could be a solid end-of-the-year buy for 2025 growth. Not only are you getting a stock that analysts suggest may grow by over 360%, but you get a semi-annual dividend with a yield of 3.19%.
About Nintendo
Nintendo Co, Ltd., together with its subsidiaries, develops, manufactures, and sells home entertainment products in Japan, the Americas, Europe, and internationally. It also offers video game platforms, playing cards, Karuta, and other products; and handheld and home console hardware systems and related software.
Read More - Current Price
- $13.40
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#6 - Fortescue (OTCMKTS:FSUGY)
The world is shifting towards clean energy, but will still need to mine metals such as iron ore as part of that future. With a company like Fortescue Ltd. (OTCMKTS: FSUGY) you’re investing in both.
Fortescue is one of the world’s leading iron ore miners with nine consecutive years of meeting or exceeding its production guidance. However, the company is also taking steps to transform its business into a green hydrogen powerhouse. Green hydrogen is the only truly clean form of hydrogen. It’s also a key factor in Fortescue’s plans to fully decarbonize its operations by 2030.
FSUGY stock is down 38% in 2024. There is plenty of risk in this stock solely based on it being a mining stock. Adding in the hydrogen angle may make it unbuyable for some investors. But if you have a high risk tolerance, it could be worth buying shares of a stock with a dividend yield of over 11.4% as of this writing.
About Fortescue
Fortescue Ltd engages in the exploration, development, production, processing, and sale of iron ore in Australia, China, and internationally. It explores for copper, gold, and lithium deposits; and rare earth elements. The company owns and operates the Chichester Hub that includes the Cloudbreak and Christmas Creek mines located in the Chichester ranges; and the Solomon Hub comprising the Firetail, Kings Valley, and Queens Valley mines located in the Hamersley ranges of Pilbara, Western Australia.
Read More - Current Price
- $25.18
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#7 - Kinder Morgan (NYSE:KMI)
Kinder Morgan Inc. (NYSE: KMI) is a midstream energy company that gives your portfolio an attractive option no matter what happens to oil prices. The company operates a network of pipelines to move oil, natural gas, refined petroleum, and other energy products through the United States and Canada.
Due to strong natural gas demand, KMI stock is up 18% for the year. The company’s year-over-year revenue and earnings aren’t particularly impressive, but that’s because oil prices remain lower than expected.
At the risk of sounding like the broken clock, it still seems like a case of when, not if, when it comes to oil prices. Growing geopolitical tensions combined with an expected increase in demand as interest rates come down are just two reasons why oil prices are likely to rise no matter the outcome of November’s election.
Analysts continue to have an upside of more than 5% on KMI stock. And shareholders also get a dividend with a juicy 5.48% yield.
About Kinder Morgan
Kinder Morgan, Inc operates as an energy infrastructure company primarily in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline, and storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas gasification, liquefaction, and storage facilities.
Read More - Current Price
- $22.21
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 6 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $22.55 (1.5% Upside)
The attraction of stocks under $50 is that they allow investors to take a substantial position for $1,000 or less. When you combine that low price with an attractive, reliable dividend, you will increase your total return. And when you reinvest those dividends over time, your portfolio will benefit from the compounding effect.
MarketBeat has a variety of screening tools to help you find the best dividend stocks for the criteria that fit your investment needs. The stocks in this presentation were found by using the MarketBeat stock screener and looking for stocks with a price under $50 and a dividend yield above 2%. That's above the average dividend yield of stocks in the S&P 500.
However, if picking individual stocks isn't for you, an attractive option could be the ProShares S&P 500 Aristocrats ETF (BATS: NOBL). This fund includes 50 stocks that are part of an exclusive group of companies that have increased their dividend for at least 25 consecutive years. The NOBL ETF offers a higher yield than the S&P 500 and a bit more aggressive dividend growth that acts as a hedge against inflation.
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