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Sometimes, the best deals on the market offer real growth potential and a decent dividend yield. That’s because these types of securities offer a dual-factor approach to appreciating by providing returns in stock growth and a compounding dividend. Yet, finding these types of dividend stocks under $10 can be challenging as the media often underreport them. Beyond this, companies that offer such yields to attract investors are usually in quieter, less volatile sectors than the popular tech and biotech industries.
Moreover, there’s inherent risk prevalent among stocks with such low valuations. Sometimes, these stocks experience low trading volumes and do not have the significant cash reserves necessary to weather a financial storm. However, occasionally, a dividend-yielding company in a strong niche presents itself as a strong investing opportunity. As such, here are three dividend stocks under $10 to consider for a cheaper entry into the compounding strength of dividends.
United Microelectronics (UMC)
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A Taiwanese semiconductor foundry often overshadowed by more prominent giants, United Microelectronics (NYSE:UMC) has exhibited rough performance year to date. The company’s stock is down nearly 9% since January, with several volatile ups and downs throughout the year. However, it offers a 6.14% dividend yield, up over 200% over five years. That’s nothing to scoff at when considering its sub-$10 price.
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The company is a technical semiconductor manufacturer specializing in radio frequency devices. As a result, its technologies have served a broad range of markets. Yet, this strategy has not resulted in growth that drives investor fervor. Instead, the company’s net income decreased by over 30% year-over-year in the first quarter of 2024.
Now, its second-quarter results will be released on July 31, so if it improves this performance, it could potentially start a bull run for the stock.
Enel Chile (ENIC)
Source: shutterstock.com/Athitat Shinagowin
One of the most vertically integrated energy companies in Chile, Enel Chile (NYSE:ENIC), has seen relatively stable growth over the last year as it expands its energy sales across its home country. For investors, a play in a stock like ENIC requires confidence in the current trajectory of the country’s economy. Thankfully, the World Bank has recognized Chiele as one of South America’s most stable and upward-trending countries.
Investing in one of its major energy companies, which focuses on traditional and green energy generation, could be a lucrative long-term play. The company’s prospects for both generation and sales will grow alongside the country’s development.