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 $1000.
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 and passive income.
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.
AGNC Investment
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This company has paid solid monthly dividends for years; its current yield is 14.96%. AGNC Investment Corp. (NASDAQ: AGNC) is a real estate investment trust (REIT) in the United States.
The company invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency.
The company funds its investments primarily through collateralized borrowings structured as repurchase agreements. It has elected to be taxed as a REIT under the Internal Revenue Code 1986. However, it would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
FAT Brands
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With a funny name and a rich 7.55% dividend, this stock makes sense for investors. FAT Brands Inc. (NASDAQ: FAT) is a multi-brand restaurant company that acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide.
It owns restaurant brands, including:
- Round Table Pizza
- Marble Slab Creamery
- Great American Cookies
- Hot Dog on a Stick
- Pretzelmaker
- Fazoli’s
- Fatburger
- Johnny Rockets
- Elevation Burger
- Yalla Mediterranean
- Buffalo’s Cafe and Buffalo’s Express
- Hurricane Grill & Wings
- Ponderosa Steakhouse / Bonanza Steakhouse
- Native Grill & Wings
- Twin Peaks
Lloyds Banking Group
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Those who know European financials are familiar with this top company that pays a 5.48% dividend. Lloyds Banking Group PLC (NYSE: LYG) provides a range of banking and financial services in the United Kingdom and internationally.
It operates through three segments:
- Retail
- Commercial Banking
- Insurance, and Wealth Managment
The Retail segment offers a range of financial service products, including current accounts, savings accounts, mortgages, motor finance, unsecured loans, leasing solutions, credit cards, and other financial services to personal and small business customers.
The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt capital market services to small and medium-sized entities, corporates, and financial institutions.
The Insurance and Wealth segment of Lloyds Banking Group is a testament to its versatility. It offers a wide array of life, home, and car insurance products and pension, investment, and wealth management products and services.
The company also caters to the digital age with its digital and mobile banking services, and provides advisory services for savings, investments, and retirement planning.
All these services are offered under the trusted brands of:
- Lloyds Bank
- Halifax
- Bank of Scotland
- Scottish Widows
- MBNA
- Schroders Personal Wealth
- Black Horse
- Lex Autolease
- Birmingham Midshires
- LDC
- IWeb
- Agricultural Mortgage Corporation
PetMed Express
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Paying a massive 13.07% dividend, this stock could be a takeover candidate. PetMed Express Inc. (NASDAQ: PETS) and its subsidiaries operate as a pet pharmacy in the United States.
The company markets prescription and non-prescription pet medications, health products, and other supplies for dogs, cats, and horses.
It offers:
- Non-prescription medications and supplies, such as flea and tick control products,
- Bone and joint care products,
- Vitamins,
- Treats,
- Nutritional supplements,
- Hygiene products, and supplies and
- Prescription medications, including heartworm preventatives, flea and tick preventatives,
- Arthritis, dermatitis, thyroid, diabetes, pain medications,
- Heart/blood pressure, other specialty medications, and generic substitutes.
The company also sells food, beds, crates, stairs, and other pet supplies.
Redwood Trust
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With a 10.58% dividend and colossal upside, intelligent traders are potentially grabbing shares of Redwood Trust Inc. (NYSE: RWT), a specialty finance company in the United States.
The company operates through three segments:
- Residential Mortgage Banking
- Business Purpose: Mortgage Banking
- Investment Portfolio
The Residential Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio.
This segment also offers derivative financial instruments to manage risks associated with residential loans.
The Business-Purpose Mortgage Banking segment operates a platform that originates and acquires business-purpose loans, such as single-family rental and bridge loans, for subsequent securitization, sale, or transfers into its investment portfolio.
The Investment Portfolio segment invests in:
- Securities retained from residential and business purpose securitization activities
- Residential and small-balance multifamily bridge loans
- Residential mortgage-backed securities issued by third parties,
- Freddie Mac K-Series multifamily loan securitizations and reperforming loan securitizations
- Servicer advance investments,
- Home equity investments, and other housing-related investments
Vodafone Group
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This company pays investors a huge 11.20% dividend and is in a sector that always has demand. Vodafone Group PLC (NASDAQ: VOD) provides telecommunication services in Europe and internationally.
It offers mobile connectivity services comprising:
- End-to-end services for mobile voice and data, messaging, device management, BYOx, and telecoms management
- Professional and consulting services
- Fixed line connectivity, such as fixed voice and data, broadband, software-defined networks, managed WAN, LAN, Ethernet, and satellite; and financial services, as well as business and merchant services
The company also provides:
- Consumer Internet of Things (IoT) propositions, as well as security and insurance products
- Mobile services
- Logistics, fleet management, and intelligent metering services
- WiFi; digital services comprising mobile application development
- Multi-access edge computing,
- Worker insights, AI assistant, drone detection, visual inspection, and mixed reality
- Vodafone Analytics platform and traditional IT hosting services, including colocation, managed hosting, security, hosting infrastructure, and flexible computing for the government
In addition, it offers integrated business communication services, fixed mobile convergence services, carrier services, and IoT devices comprising managed tablets and integrated terminals.
Further, it offers M-Pesa, an African mobile money platform that allows payments and provides financial services; Vodafone Business’ multi-cloud platform; and productivity solutions.
It also operates digital cloud-based television platforms.
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