In this article, we discuss 13 best affordable dividend stocks to buy. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read 5 Best Affordable Dividend Stocks To Buy.
In recent months, the bull market seems to have encountered obstacles. The S&P 500 declined by nearly 3% in October and NASDAQ fell by 3.43% during the month. It's no longer solely dependent on the Federal Reserve's actions, as it has been for the past year and a half. The positive aspect is that we don't have to be able to predict where the market is heading. Therefore, a prudent approach is to regularly invest in strong dividend-yielding stocks when they are attractively valued, rather than trying to time the market's highs and lows.
Examination of historical data reveals that undervalued stocks have exhibited more favorable long-term performance. Eugene Fama, a distinguished professor at the University of Chicago, and Kenneth French, a notable professor at Dartmouth College, conducted research that demonstrated how stocks with lower price-to-book ratios outperformed the S&P 500 index between 1963 and 1990, as reported by Oakmark Funds. The report also mentioned that investors who focused on growth typically held shares in exciting and dynamic companies. However, in the end, value investors emerged as the winners, as their investments in less flashy and more conventional stocks often yielded higher returns.
We've also published reports showing that value stocks tend to provide good returns over the long term. In our article titled 12 Best Value Dividend Stocks to Buy According to Warren Buffett, we reported that when inflation was high in 2022, value stocks globally saw a 7% decrease, whereas growth stocks faced a much larger decline of 28.6%. It's worth noting that in the US, value stocks performed exceptionally well compared to growth stocks, marking their strongest performance relative to growth stocks since the dot-com crash in 2000.
Undervalued stocks that pay dividends should be on investors' radars as they offer a steady income stream, making them attractive to income-focused investors. In addition to this, these stocks have the potential for capital appreciation as the market gradually recognizes their true value, providing a dual benefit of income and growth. Dividend payments can act as a hedge against inflation, as companies often raise their dividends to keep pace with rising costs. Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) are some of the best dividend stocks with strong dividend growth streaks. In this article, we will take a look at affordable dividend stocks.
To create this list, we screened for dividend stocks with a P/E ratio under 25 and share prices under $50 as of November 5. Then, we picked companies from that list that have a reliable history of paying dividends consistently to their shareholders. We ranked the resulting list based on the number of hedge fund investors who held stakes in these companies, as per the Q2 2023 data from Insider Monkey's database.
Manulife Financial Corporation (NYSE:MFC) is a Canada-based multinational financial services company that provides a range of financial products and services to individuals, businesses, and institutional clients. The company has raised its payouts for 10 years straight, which makes MFC one of the best dividend stocks on our list. It currently pays a quarterly dividend of C$0.365 per share and has a dividend yield of 5.78%, as of November 5.
At the end of Q2 2023, 18 hedge funds in Insider Monkey's database reported having stakes in Manulife Financial Corporation (NYSE:MFC), up from 15 in the previous quarter. The consolidated value of these stakes is more than $96 million.
Sirius XM Holdings Inc. (NASDAQ:SIRI) is an American leading audio entertainment company, primarily known for its satellite radio services. The company has been raising its dividends for seven consecutive years, including the recent hike of 9.9% in October this year. It offers a quarterly dividend of $0.o266 per share and has a dividend yield of 2.15%, as of November 5.
As of the end of Q2 2023, 19 hedge funds tracked by Insider Monkey owned stakes in Sirius XM Holdings Inc. (NASDAQ:SIRI), down from 24 in the previous quarter. The collective value of these stakes is over $76.4 million. With over 4 million shares, Balyasny Asset Management was the company's leading stakeholder in Q2.
Apogee Enterprises, Inc. (NASDAQ:APOG) specializes in architectural and building glass solutions. The Minnesota-based provides a range of products and services to support the design, construction, and renovation of commercial and institutional buildings. On October 6, the company declared a quarterly dividend of $0.24 per share, which was consistent with its previous dividend. In 2023, it stretched its dividend growth streak to 10 years, which makes APOG one of the best dividend stocks on our list. As of November 5, the stock has a dividend yield of 2.15%.
The number of hedge funds tracked by Insider Monkey owning stakes in Apogee Enterprises, Inc. (NASDAQ:APOG) jumped to 20 in Q2 2023, from 15 in the previous quarter. The collective value of these stakes is roughly $50 million.
Flowers Foods, Inc. (NYSE:FLO) is next on our list of the best dividend stocks to buy. The leading American baking company specializes in the production and marketing of a wide range of fresh and frozen bakery products. The company has been raising its dividends for 21 consecutive years and pays a quarterly dividend of $0.23 per share. The stock's dividend yield on November 5 came in at 4.13%.
In the second quarter of 2023, Flowers Foods, Inc. (NYSE:FLO) reported revenue of $1.23 billion, which showed an 8.8% growth from the same period last year. The company's cash position remained strong as it generated $129 million in operating cash flow and returned $98.1 million to shareholders through dividends.
At the end of June 2023, Flowers Foods, Inc. (NYSE:FLO) was a part of 21 hedge fund portfolios, according to Insider Monkey's data. The stakes owned by these hedge funds have a total value of roughly $146 million. Among these hedge funds, AQR Capital Management was the company's leading stakeholder in Q2.
Enterprise Products Partners L.P. (NYSE:EPD) is an American energy company, based in Texas. The company primarily focuses on the transportation, storage, and processing of energy commodities and operates a vast network of pipelines, terminals, processing plants, and storage facilities.
Enterprise Products Partners L.P. (NYSE:EPD), one of the best dividend stocks on our list, pays a quarterly dividend of $0.50 per share. The company's dividend growth streak currently stands at 24 years. As of November 5, the stock has a dividend yield of 7.51%.
As of the end of the June quarter of 2023, 25 hedge funds in Insider Monkey's database owned investments in Enterprise Products Partners L.P. (NYSE:EPD), compared with 26 in the previous quarter. The overall value of these stakes is over $272.7 million.
Unum Group (NYSE:UNM) is a Tennessee-based insurance and financial services company that specializes in providing a range of insurance products and employee benefits solutions to individuals, employers, and organizations. On October 13, the company declared a quarterly dividend of $0.365 per share, which fell in line with its previous dividend. The company has raised its dividends for 15 years in a row and has a dividend yield of 3.35%, as recorded on November 5.
Insider Monkey's database of Q2 2023 indicated that 32 hedge funds owned stakes in Unum Group (NYSE:UNM), up from 30 in the previous quarter. These stakes are collectively valued at over $852.7 million.
Altria Group, Inc. (NYSE:MO) is a Virginia-based tobacco company that is known for its significant presence in smokeless tobacco markets, as well as its interest in the cannabis industry. The company remained committed to its shareholder obligation as it returned nearly $5 billion to shareholders through dividends in the first nine months of the year.
Altria Group, Inc. (NYSE:MO) currently pays a quarterly dividend of $0.98 per share and has a dividend yield of 9.64%, as of November 5. With a dividend growth streak of 54 years, MO is one of the best dividend stocks on our list. With over 7.2 million shares, Harris Associates was the company's largest stakeholder in Q2.
The Kroger Co. (NYSE:KR) is one of the largest retail grocery chains in the US. The company operates a wide range of stores and provides various services in the retail industry. The company has raised its dividends for 17 consecutive years and currently pays a quarterly dividend of $0.29 per share. As of November 5, the stock has a dividend yield of 2.56%.
As per Insider Monkey's database of Q2 2023, 43 hedge funds in Insider Monkey's database reported having stakes in The Kroger Co. (NYSE:KR). The collective worth of these stakes is more than $3.13 billion.
