24/7 Insights
- Dividend stocks offer investors the opportunity to increase investment total return.
- Lower-priced dividend shares allow investors to build a larger position.
- Check out this free report: 2 legendary, high-yield dividend stocks Wall Street loves.
Dividend stocks are trusted among investors. They offer a secure income stream and a promising path for total return. Total return, a comprehensive measure of investment performance, includes interest, capital gains, dividends, and distributions realized over time.
Let's take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.
As mentioned,lower-priced dividend stocks not only help investors acquire more shares but also have the potential to increase the passive income stream they can produce significantly.
We carefully screened our 24/7 Wall St. dividend stock database for stocks priced under $25 that offer solid and dependable dividends and outstanding upside potential. Five companies, each rated Buy at top Wall Street firms, are excellent additions to portfolios.
Why do we cover dividend stocks?
Dividend stocksprovide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner's continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
AT&T
The legacytelecommunications company has been going through a lengthy restructuring, lowering the dividend, which still checks in at 6.22%. AT&T Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services.
Its Communicationssegment offers wireless voice and data communications services.
AT&T sells through itscompany-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T alsoprovides:
- Data
- Voice
- Security
- Cloud solutions
- Outsourcing
- Managed and professional services
- Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.
In addition, this segment offersbroadband fiber and legacy telephony voice communication services to residential customers.
It markets its communicationsservices and products under these brands:
- AT&T
- Cricket
- AT&T PREPAID
- AT&T Fiber
The company's Latin Americasegment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.
FS KKR
This is a well-knownname on Wall Street, offers a solid entry point at current levels, and pays a staggering 13.59 dividend. FS KKR Capital Corp. (NASDAQ: FSK) is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments.
The companyalso seeks to invest in:
- First-lien senior secured loans
- Second-lien secured loans
- Subordinated loans
- Mezzanine loans
The firm also receivesequity interests in connection with debt investments, such as warrants or options for additional consideration. It also seeks to purchase minority interests in common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor.
The fund mayinvest in corporate bonds and similar debt securities opportunistically.
The fund does notseek to invest in start-ups, turnaround situations, or companies with speculative business plans. It aims to invest in small and middle-market companies in the United States.
FS KKR seeks to investin firms with annual revenue between $10 million to $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.
Highwoods Properties
Trading just belowa 52-week high, Highwood Properties Inc. (NYSE: HIW) is a publicly traded, fully integrated office real estate investment trust that pays a stellar 7.96% dividend and has huge upside potential. The stock is very close to breaking out.
The company owns, develops, acquires, leases, and manages properties primarily in the best business districts (BBDs) of:
- Atlanta
- Charlotte
- Dallas
- Nashville
- Orlando
- Raleigh
- Richmond
- Tampa
Highwoods Properties'biggest customers include the U.S. government, financial services firms, industrial supply retailers, and health care companies.
Kohl’s
This top retailer gotwalloped back last fall and still offers an excellent entry point now, yielding 8.70%. Kohl’s Corp. (NYSE: KSS) operates department stores in the United States.
It providesprivate label, exclusive, and national brand apparel, footwear, accessories, beauty, and home products to children, men, and women customers. The company also sells its products online at Kohls.com and through mobile devices.
The companyprovides its products primarily under these brand names:
- Croft & Barrow
- Jumping Beans
- SO
- Sonoma Goods for Life
- Food Network,
- LC Lauren Conrad
- Nine West
- Simply Vera
- Vera Wang.
Kohl's partnerswith Amazon, where customers can return items through the retailer. Some feel the deal should be expanded with a full partnership or even Amazon buying Kohl's.
Five Under $20 Dividend Stocks to Buy Now
Mach Natural Resources
This 2023 IPOis trading below the initial price and will pay a gigantic 15.3% dividend. Mach Natural Resources L.P. (NYSE: MNR) is an independent upstream oil and gas company focused on the acquisition, development, and production of oil, natural gas, and natural gas liquids reserves in the Anadarko Basin region of Western Oklahoma, southern Kansas, and the Texas panhandle.
The analysts at Raymond Jamesnoted that Mach is led by Tom Ward, Co-Founder of Chesapeake Energy. Mach is another entrant into the E&P MLP space. It is a pure-play operator in the Anadarko Basin, leveraging its strong position (1 million net acres) to become the primary consolidator in the region.
Mach’s midstream positionand lower base decline (~20%) allow the company to target a lower reinvestment rate (~30%) relative to the overall industry. In addition, it is one of the only companies organized as a limited partnerships that is an oil and gas producer.
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