In this article, we discuss 14 best dividend-paying stocks under $50. You can skip our detailed analysis of dividend stocks and their returns over the years, and go directly to read 5 Best Dividend-Paying Stocks Under $50.
The current inflationary environment has turned investors’ attention toward income-generating stocks as they look for regular income streams. When inflation is high, the value of money declines, and investors need to find investments that can provide returns that at least keep up with inflation. Dividend-paying stocks can be a good choice because they provide a steady stream of income that can help offset the effects of inflation. In addition to this, some companies may increase their dividends to keep up with this environment, providing even more protection against the erosion of purchasing power caused by inflation. Some of the best dividend stocks that are popular among investors include Lowe’s Companies Inc. (NYSE:LOW), AbbVie Inc. (NYSE:ABBV), and S&P Global Inc. (NYSE:SPGI).
During previous inflationary periods, dividend stocks outperformed other asset classes and significantly contributed to the market’s overall returns. According to a report by Hartford Funds, dividends represented over 41% of the market’s returns since the 1940s and the percentage increased during periods when inflation was high. We also previously reported that during the decades of the 1940s and the 1970s, when inflation reached its record high, dividends accounted for 53% and 50% of the stock market’s total return, respectively.
Analysts also advise investing in dividend stocks in this environment to decrease volatility and for some downside protection. John Sheehy, manager of Fidelity Equity Dividend Income Fund, spoke to Fidelity Investments about the importance of dividend investments during periods of market fluctuations. Here are some comments from the analyst:
“Income from dividends is a head start in any market, which is why dividend-paying stocks have historically fared well in low-return markets and provided good downside risk protection in challenging markets such as 2022.”
He further emphasized that investors should not focus on dividend yields when investing in dividend stocks as high yields may indicate higher payout ratios. Instead, companies with strong financials and solid balance sheets should be their choices. He said:
“I look for the ability to maintain and grow dividends over time, which implies a resilient business model.”
Readers can also have a look at 25 Best Stocks for Dividends to know more about dividend stocks and their importance.
Image by Steve Buissinne from Pixabay
Our Methodology:
We scanned Insider Monkey’s database of 943 hedge funds and picked 14 dividend stocks priced under $50 as of April 7. We preferred stocks with strong dividend growth and stability. These are the best dividend stocks under $50 according to hedge funds.
Best Dividend-Paying Stocks Under $50
14. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 24
Share Price as of April 7: $26.3
Enterprise Products Partners L.P. (NYSE:EPD) is a Texas-based midstream natural gas and crude oil pipeline company. On April 6, the company declared a quarterly dividend of $0.49 per share, which fell in line with its previous dividend. It is one of the best dividend stocks on our list as it has raised its dividends for 23 years straight. The stock has a dividend yield of 7.43%, as of April 7.
Lowe’s Companies Inc. (NYSE:LOW), AbbVie Inc. (NYSE:ABBV), and S&P Global Inc. (NYSE:SPGI) are some other popular dividend stocks that have grabbed investors’ attention.
In March, Scotiabank initiated its coverage on Enterprise Products Partners L.P. (NYSE:EPD) with an Outperform rating and a $31 price target. The firm gave a positive stance on the energy sector.
As of the close of Q4 2022, 24 hedge funds in Insider Monkey’s database owned stakes in Enterprise Products Partners L.P. (NYSE:EPD), compared with 21 in the previous quarter. The collective value of these stakes is over $242.4 million.
Legacy Ridge Capital Management, LLC mentioned Enterprise Products Partners L.P. (NYSE:EPD) in its Q4 2022 investor letter. Here is what the firm has to say:
“Enterprise Products Partners L.P. (NYSE:EPD) is still owned in the fund and remains one of our largest positions, as it has been since the partnership was founded. This has not been a great investment. Shares are down about 6% since I first wrote about it. However, we have received $8.93 per share in dividends, which is about 34% of the 2018 share price. So, with dividends included we’ve made 28% cumulatively over 5-years. Still not good, but not an impairment of capital either.
Since 2018, EPD’s dividend yield has gone from 6.5% to 8% with the annual per share payout growing from $1.72 to $1.96, +14%. The pace of dividend growth has recently increased from about 2% to 5%+. Additionally, Distributable Cash Flow per share (what could be paid to us if management wanted to) has increased 22%, from $2.73 to $3.33, while leverage has come down a little over ½ a turn. So, the balance sheet and cash flow metrics are in better shape than they were 5-years ago, and they were pretty good 5-years ago.
The competitive dominance of the asset base, industry leading low leverage, and a founding family with multiple billions of dollars invested alongside us keep it a core holding in the portfolio. We’ll continue to own this company unless the shares become meaningfully overvalued, and if it gets cheaper, we would be very comfortable owning more.”
13. Amcor plc (NYSE:AMCR)
Number of Hedge Fund Holders: 24
Share Price as of April 7: $11.25
Amcor plc (NYSE:AMCR) is a global packaging company that develops and produces flexible packaging and offers related services to its consumers. In its fiscal Q2 2023, the company reported revenue of $3.64 billion, which showed a 3.85% growth from the same period last year. During the six months that ended December 2022, it returned nearly $400 million to shareholders in dividends, which makes it one of the best dividend stocks on our list.
Amcor plc (NYSE:AMCR) currently pays a quarterly dividend of $0.1255 per share and has a dividend yield of 4.36%, as of April 7. The company holds a 39-year track record of consistent dividend growth.
As per Insider Monkey’s Q4 2022 database, 24 hedge funds owned investments in Amcor plc (NYSE:AMCR), up from 23 a quarter earlier. These stakes are collectively valued at $258.2 million.
12. Medical Properties Trust, Inc. (NYSE:MPW)
Number of Hedge Fund Holders: 28
Share Price as of April 7: $8.10
An American real estate investment trust company, Medical Properties Trust, Inc. (NYSE:MPW) is next on our list of the best dividend stocks under $50. Barclays maintained an Overweight rating on the stock in April with a $12 price target, appreciating the company’s overall performance last year.
On February 16, Medical Properties Trust, Inc. (NYSE:MPW) declared a quarterly dividend of $0.29, which was consistent with its previous dividend. The company has raised its dividends for nine years straight. The stock’s dividend yield on April 7 came in at 14.32%.
The number of hedge funds tracked by Insider Monkey owning stakes in Medical Properties Trust, Inc. (NYSE:MPW) grew to 28 in Q4 2022, from 23 in the previous quarter. The collective value of these stakes is over $367.5 million. Balyasny Asset Management owned the largest stake in the company worth over $84.3 million.
11. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 28
Share Price as of April 7: $40.31
Hormel Foods Corporation (NYSE:HRL) is a Minnesota-based multinational food processing company. In its recently-announced Q1 2023 earnings, the company posted revenue of $3 billion, which fell by 1.3% from the same period last year. The company’s operating cash flow for the quarter came in at $204 million.
Hormel Foods Corporation (NYSE:HRL), one of the best dividend stocks on our list, currently pays a quarterly dividend of $0.275 per share. The stock has a dividend yield of 2.73%, as recorded on April 7. The company is a Dividend King with 57 years of consistent dividend growth.
Of the 943 hedge funds in Insider Monkey’s database, 28 funds owned stakes in Hormel Foods Corporation (NYSE:HRL) in Q4 2022, with a total value of over $490.6 million.
10. KeyCorp (NYSE:KEY)
Number of Hedge Fund Holders: 33
Share Price as of April 7: $11.91
KeyCorp (NYSE:KEY) is an American retail banking company, based in Ohio. The company provides financial services to retail and small businesses. In April, Morgan Stanley maintained an Equal Weight rating on the stock with a $14 price target, highlighting individual bank deposit trends.
KeyCorp (NYSE:KEY) currently pays a quarterly dividend of $0.205 per share and has a dividend yield of 6.88%, as of April 7. The company is one of the best dividend stocks on our list as it has raised its dividends for 12 years in a row.
At the end of Q4 2022, 33 hedge funds in Insider Monkey’s database owned stakes in KeyCorp (NYSE:KEY), the same as in the previous quarter. The collective value of these stakes is over $582 million.
9. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 34
Share Price as of April 7: $17.71
Kinder Morgan, Inc. (NYSE:KMI) is a Texas-based energy company that specializes in pipeline transportation and natural gas. The company has been raising its dividends consistently for the past five years, which places it as one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.2775 per share and has a dividend yield of 6.27%, as of April 7.
In March, Scotiabank gave a positive stance on the energy sector and appreciated Kinder Morgan, Inc. (NYSE:KMI)’s performance last year. Given this, the firm initiated its coverage on the stock with a Sector Perform rating and a $20 price target.
At the end of December 2022, 34 hedge funds tracked by Insider Monkey reported owning stakes in Kinder Morgan, Inc. (NYSE:KMI), with a consolidated value of over $1.11 billion. Among these elite funds, Orbis Investment Management was the company’s largest stakeholder in Q4.
8. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 45
Share Price as of April 7: $44.43
Altria Group, Inc. (NYSE:MO) is a Virginia-based tobacco company that also manufactures related products. The company remained committed to its shareholder return in FY22 as it paid over $6.6 billion to investors in dividends. It currently pays a quarterly dividend of $0.94 per share and has a dividend yield of 8.46%, as of April 7. It has been raising its dividends consistently for the past 53 years, which makes it one of the best dividend stocks on our list.
As of the close of Q4 2022, 45 hedge funds tracked by Insider Monkey reported owning stakes in Altria Group, Inc. (NYSE:MO), compared with 47 in the previous quarter. These stakes have a total value of over $1.8 billion.
Broyhill Asset Management mentioned Altria Group, Inc. (NYSE:MO) in its Q4 2022 investor letter. Here is what the firm has to say:
“We rebalanced our tobacco exposure during the year, reducing our investment in Altria Group, Inc. (NYSE:MO) as the future of the company’s combustible cigarette business became increasingly questionable given pending US legislation and a lackluster portfolio of reduced risk products. We reinvested the proceeds in Philip Morris so that relative position sizing is more consistent with our increased conviction.”
7. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 56
Share Price as of April 7: $39.4
Verizon Communications Inc. (NYSE:VZ) is an American multinational telecommunications company. It is among the best dividend stocks on our list as it holds a 16-year streak of consistent dividend growth. The company pays a per-share dividend of $0.6526 every quarter for a dividend yield of 6.61%, as recorded on April 7.
At the end of Q4 2022, Verizon Communications Inc. (NYSE:VZ) was a part of 56 hedge fund portfolios, as per Insider Monkey’s data. The stakes owned by these funds have a total value of over $1.5 billion.
Mawer Investment Management mentioned Verizon Communications Inc. (NYSE:VZ) in its Q3 2022 investor letter. Here is what the firm has to say:
“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) has been impacted as wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”
6. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 66
Share Price as of April 7: $30.02
CSX Corporation (NASDAQ:CSX) is a Florida-based holding company that specializes in rail transportation. On February 15, the company declared a 10% hike in its quarterly dividend to $0.11 per share. Through this increase, the company took its dividend growth streak to 18 years, coming through as one of the best dividend stocks on our list. The stock’s dividend yield on April 7 came in at 1.47%.
CSX Corporation (NASDAQ:CSX) can be added to dividend portfolios alongside some of the best dividend stocks such as Lowe’s Companies Inc. (NYSE:LOW), AbbVie Inc. (NYSE:ABBV), and S&P Global Inc. (NYSE:SPGI).
The number of hedge funds tracked by Insider Monkey having stakes in CSX Corporation (NASDAQ:CSX) grew to 66 in Q4 2022, from 61 in the previous quarter. These stakes are valued at $5.32 billion collectively. With over 58 million shares, Soroban Capital Partners was the company’s leading stakeholder in Q4.
Click to continue reading and see 5 Best Dividend-Paying Stocks Under $50.
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Disclosure. None. 14 Best Dividend-Paying Stocks Under $50 is originally published on Insider Monkey.