Best monthly dividend stocks under $10
Investing in the stock market is one of the best ways to earn decent returns on your hard-earned money.
People look to invest in various types of stocks from varied sectors based on the company’s performance, future outlook, management, operational capabilities, and historical yield.
One of the leading parameters an investor looks at before buying a stock is its low price and dividend yield.
Many fundamental stock investors believe if a company is paying a high dividend it is reinvesting a lesser amount of its profit in its growth and hence avoid high dividend yield stock citing low growth opportunities in such companies.
However, a contrary belief also exists among many investors who look to buy stocks at low prices with good dividend yields to safeguard regular income.
Many new budding stock investors look for various approaches to investing and to ease your search for low-cost high dividend yield stocks which provide regular cash flow in your bank account we have prepared this article to discuss more best monthly dividend stocks under $10.
Before we move to the list of best monthly dividend stocks under $10 we would like to give new investors a basic understanding of some of the key terminologies involved in stock market investment for ease of understanding going forward in this article.
Dividend: A dividend is a portion of retained earnings a company’s board of directors or management decides to distribute among its shareholders.
At no point does dividend payment is a mandatory disbursal of money.
Both the decision of payment and amount of payment is under the sole discretion of the company’s board and even after a decision of dividend payment is made by the board it requires to be approved through voting by all shareholders.
Dividend Announcement Date: It’s the date on which the company formally makes a statement of intent to disburse dividends to its shareholders.
Ex-Dividend Date: It’s the date on which the list of shareholders is finalized at end of the day for the purpose of dividend payment
Record Date: The record date is the cutoff date, established by the company in order to determine which shareholders are eligible to receive a dividend or distribution.
Payment Date: It’s the day of the final payment of the dividend to all eligible shareholders of the dividend-paying company’s stock.
Impact of dividend on stock price
Many investors wonder why stock prices fall rise/fall on the announcement date of the dividend and fall on the record date of the dividend.
Well to start with as a company declares a hefty dividend it may lead to a number of investors looking to buy the stock to be awarded the dividend leading to a sharp increase.
A good dividend declaration is usually coupled with a robust financial performance of the company leading to a stock price spike.
However, many a time investors view the event as a decrease in cash of the company and hence value the company at a lower stock price and hence sell their shares leading to a fall in stock prices.
On the ex-dividend date, the share price opens at an adjusted price of stock price minus dividend per share and hence the fall in share price.
These implications of dividend announcement and payout are important for one to understand before investing in dividend stocks as it directly affects stock prices and hence there is always a trade-off between dividend gains and capital gain from stocks.
Why companies pay dividends
Most companies pay dividends to ensure they keep the investors engaged and invested for the long term.
A company also aims to shell out extra cash it does not require for any further investment to ensure that big companies do not target to acquire them.
List of best monthly dividend stocks under $10
Finally, we are ready with the much-awaited list you wanted to get your eyes on. So here we go with the best monthly dividend stocks under $10
1. Annaly Capital Management (NLY):
It’s a capital management company that majorly invests in and finances residential and commercial assets.
The company has been trading for most of 2022 at a stock price of $6.45 and with a dividend yield of 11.083 %, it is our first pick of the best monthly dividend-paying stock one can look to invest in.
It has a market cap of $9.42 billion and has made a profit margin of 83.239%.
2. Aegon NV (AEG)
It’s a Netherlands-based company headquartered in Amsterdam.
The company operates in the space of Life insurance, pensions, and asset management sectors.
The company has a strong global presence with 26000 employees currently employed under its umbrella.
The company has a good dividend yield of 3.69%.
It has a market cap of 10.56 billion, a profit margin of 1.604%, the price of a stock is $5, and a normalized PE ratio of 34.418 suggesting a strong fundamental in addition to its low price and high dividend yield.
3. Person PLC (PSO)
This is a company associated with the education business as it provides educational material.
With the advent of the pandemic, it was able to scale up its business with its online learning materials and as a result, its stock price rallied 94% in less than a year’s time frame.
Apart from the high cash flow, the company provides a good dividend yield of 2.85% to its investors.
It has a market cap of 7.20 billion pounds and achieved a profit margin of 7%.
4. United Microelectronics Corp (UMC)
It’s a Taiwan-based chip manufacturer listed on USA’s stock market. Apart from a high dividend yield of 3.35% and the current price of $8, It has experienced a strong rally in its stock prices allowing a strong capital gain in addition to its dividend yield.
It has a market cap of $20.54 billion and achieved a 25% profit margin. With a strong EPS and high return on investment, it’s a good buy as a high dividend stock.
With the demand for chips seeming to grow with the current growth trend in IT, this company provides its investor a unique opportunity to invest in it at below $10, get constant dividends, and stay invested to reap higher capital gains in the future.
5. Itaú Unibanco Holding SA (ITUB)
It’s a Brazilian-based banking firm that allows investors to invest in Brazilian companies.
Due to a decline in the Brazilian economy and its emerging nature overall investors should remain cautious but provides them with a good opportunity to invest at below $10 price and obtain a 1.63% dividend yield. The company has a market cap of $52 billion and achieved a high-profit margin of 17.986%.
6. CatchMark Timber Trust, Inc. (CTT)
It’s a company that operates in the space of logging and mill. With the inflationary trend around wood prices, it provides a buying opportunity at the current low level of prices at a dividend yield of 3.72%.
7. ASE Technology Holding Co. Ltd. (ASX)
It is an Asia-based semiconductor company.
It operates as a tester and packer of semiconductor chips and has a strong growth prospect with demands for semiconductors rising.
Its currently trading at $6.50 and has a high dividend yield of 4.49%.
8. Crawford & Co (CRD.A).
It’s a company operating as a service provider to insurance companies and is the world’s largest independent claims management organization with a global presence in 70 countries and 700 branches.
The company provides its investors with a dividend yield of 3.23%.
MORE ABOUT DIVIDEND STOCKS
Before you go ahead and buy one of these dividend stocks available at a low price there are some key learnings one must understand.
As we earlier discussed the discretion of the board in paying out dividends they can at any time change the frequency of payout from monthly to quarterly or yearly.
Secondly one must consider the trade-off between the high dividend payout of a stock and its low growth opportunity as the company instead of investing back in new projects is paying the money to investors.
Steps to Buy Dividend Stocks
Step 1: Select a trusted broker: The first step is to select a regulated broker for investing in stocks. Key parameters for selection would be the required brokerage, and maintenance fee.
Step 2: Open an Account and add Funds: Once you have selected the best broker create your account with it and add the required funds to begin investing
Step 3: Selection of Stock: Based on strong fundamentals, a price below $10 and a high dividend yield select the stocks to invest in.
Step 4: Next open order and start investing in selected stocks.
We completed our discussion on the best monthly dividend stocks under $10. We have helped you understand the key terminologies revolving around stock investment and then explained in detail about dividend payout by companies.
Our list of best monthly dividend stocks under $10 may change with time as stock prices may rise and dividend payout may stop, hence it is important that you read this article, again and again, to analyze the psyche behind selecting the best stock with monthly dividend payout.
Hopefully, you enjoyed reading this and its content helps you in making good investment choices.
Keep learning and keep investing !!!