Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
A recent study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
For younger investors or those on a tight budget, investing to generate consistent passive income can be daunting because many top dividend stocks trade anywhere from $25 to over $100 per share. Realizing any significant return on investment can be challenging with a small investing capital base of $500.
We screened our 24/7 Wall St. dividend income database, looking for solid, lower-priced stocks that pay dependable dividends that investors can purchase and start to generate positive total returns.
Why are we covering this?
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Investing at any age requires a starting point, and many individuals have limited funds to dedicate to the stock market at the beginning of their investment journey. If that is true, looking for stocks that have consistently paid dividends over the years but are lower priced than large-cap blue-chip companies makes sense.
Barings BDC
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This business development company is an industry leader and pays a massive 11.34% dividend. Barings BDC, Inc. (NYSE: BBDC) is a publicly traded, externally managed investment company elected to be treated as a business development company under the Investment Company Act 1940.
It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments, and senior secured private debt investments in private middle-market companies operating across various industries.
It specializes in :
- Mezzanine,
- Leveraged buyouts
- Management buyouts
- ESOPs
- Change of control transactions
- Acquisition financings
- Growth financing
- Recapitalizations in lower-middle market, mature, and later-stage companies
It invests in manufacturing and distribution, business services and technology, transportation and logistics, and consumer products and services. It invests in the United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor-backed.
B2Gold
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For those seeking high returns, this small-cap gold stock offers an exciting opportunity for sector exposure. B2Gold Corp. (NYSE: BTG) is a dynamic gold producer with three mines in Mali, the Philippines, and Namibia.
It also operates the Fekola Mine in Mali, the Masbate Mine in the Philippines, and the Otjikoto Mine in Namibia.
The company also has a 25% interest in Calibre Mining Corp. and approximately 19% interest in BeMetals Corp. In addition, it has a portfolio of other evaluation and exploration assets in Mali, Uzbekistan, and Finland.
The Cato Corporation
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Paying shareholders a gigantic 14.68% dividend, this company, founded in 1946, could attract value buyers at current trading levels. The Cato Corporation (NYSE: CATO) and its subsidiaries operate as a specialty fashion apparel and accessories retailer in the southeastern United States.
It operates through two segments:
- Retail
- Credit.
The company’s stores and e-commerce websites offer a range of apparel and accessories, including:
- Dressy, career, and casual sportswear
- Dresses
- Coats
- Shoes
- Lingerie
- Costume jewelry
- Handbags
- Men’s wear
- Lines for kids and infants
It operates its stores and e-commerce websites under these names:
- Cato
- Cato Fashions
- Cato Plus
- It’s Fashion
- Fashion Metro
- Versona names
It also provides credit card services and layaway plans for its customers.
Nokia
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Once a dominant force in the cell phone arena, Nokia Corporation (NYSE: NOK) has demonstrated its resilience and adaptability in the face of technological advancements. Today, it provides worldwide mobile, fixed, and cloud network solutions, continuing to evolve and meet the changing needs of the industry, and pays a solid 4.64% dividend.
The company operates through four segments:
- Network Infrastructure
- Mobile Networks
- Cloud and Network Services
- Nokia Technologies
The company provides fixed networking solutions, such as:
- Fiber and copper-based access infrastructure
- In-home Wi-Fi solutions and cloud and virtualization services
- IP networking solutions, including IP access, aggregation, and edge and core routing for residential, mobile, enterprise and cloud applications
- Optical network solutions that provide optical transport networks for metro, regional, and long-haul applications
- Subsea applications and submarine networks for undersea cable transmission
It serves its products and services to:
- Communications service providers
- Webscales and hyperscalers
- Digital industries
- Government
The company also offers mobile technology products and services for radio access networks, microwave radio links for transport networks, network management solutions, network planning, optimization, network deployment, and technical support services.
In addition, it offers cloud and network services, including core network solutions, such as voice and packet core; business applications, such as security, automation, and monetization; cloud and cognitive services; and enterprise solutions, including private wireless and industrial automation.
United Microelectronics
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This Taiwanese semiconductor company pays a substantial 7.58% dividend. United Microelectronics Corporation (NYSE: UMC) operates as a semiconductor wafer foundry in Taiwan, Singapore, China, Hong Kong, Japan, the United States, Europe, and internationally.
The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers.
Like many chip companies, United Microelectronics has experienced some tough sledding. Still, many think the supply chain issues that have dogged the industry over the last few years are starting to ease. Some on Wall Street feel the stock has the potential that industry powerhouse Taiwan Semiconductor has shown.
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