4 Strong-Buy High-Yield Dividend Stocks Under $20 to Buy Hand-Over-Fist Now

Investing

Published: May 10, 2025 6:46 am

Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and have substantial total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.

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.

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We screened our 24/7 Wall St. high-yield dividend stock research database, looking for stocks trading below the $20 level that offer investors enormous total return potential. While more suited for growth and income investors with higher risk tolerance, all four of these stocks look like solid ideas for the rest of 2025. All are rated Buy at top Wall Street firms.

Why do we cover high-yield dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

AES

This conservative American utility and power generation company offers a hefty dependable dividend and considerable upside potential. AES Corp. (NYSE: AES) operates as a diversified power generation and utility company in the United States and internationally.

The company owns and operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and operates utilities to develop or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.

It uses various fuels and technologies to generate electricity, such as:

Coal
Gas
Hydro
Wind
Solar
Biomass
Renewables, comprising energy storage and landfill gas.

The company owns and operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.

Barclays has an Overweight rating on the shares with a massive $23 price target.

Energy Transfer

Energy Transfer L.P. (NYSE: ET) is one of North America’s largest and most diversified midstream energy companies. This top master limited partnership is another safe way for investors looking for energy exposure and income. Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.

The company is a publicly traded limited partnership with core operations that include:

Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
NGL fractionation
Various acquisition and marketing assets.

After purchasing Enable Partners in December 2021, Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in 41 states, covering all major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.

Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco, and the public partner interests and 39.7 million standard units of USA Compression Partners.

Morgan Stanley has an Overweight rating with a $26 target price.

Ford

Ford Motor Co. (NYSE: F) is an American automotive corporation founded in 1903 by Henry Ford and 11 associate investors. Shares of this legacy carmaker offer shareholders a rich dividend and considerable upside potential. Ford develops, delivers, and services a range of trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide.

It operates through five segments:

Ford Blue
Ford Model e
Ford Pro
Ford Next
Ford Credit

The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors, dealers, and dealerships to commercial fleet customers, daily rental car companies, and governments.

It also engages in vehicle-related financing and leasing activities to and through automotive dealers.

In addition, the company provides retail installment sale contracts for:

New and used vehicles
Directly finances leases for new cars to retail and commercial customers, including leasing companies, government entities, daily rental companies, and fleet customers

Furthermore, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, as well as loans to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs.

Barclays has an Overweight rating with a $14 price target.

Invesco

This top money management firm pays a solid high-yield dividend and has upside potential from current trading levels. Invesco Ltd. (NYSE: IVZ) is an independent investment management firm that serves the retail and institutional markets within the investment management industry in 120 countries in the Americas, Europe, Middle East, Africa, and Asia-Pacific.

It offers a range of investment strategies across asset classes, investment styles, and geographies.

Its asset classes include equity, fixed income, balanced, alternatives and money market.

Retail assets under management include:

Mutual funds
Exchange-traded funds
Separately managed accounts
Individual savings accounts
Investment companies with variable capital
Investment trusts
Open-end mutual funds
Unit investment trusts
Variable insurance funds

Its institutional assets include institutional separate accounts, private funds, open-end mutual funds, and collective trust funds.

The company’s client base includes public and private entities, unions, non-profit organizations, endowments, foundations, financial institutions, and sovereign wealth funds.

Argus has a Buy rating and a $17 price objective.

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