Friday Dec 09, 2022

5 Cheap Dividend Stocks Under $5 – InvestorPlace


When it comes to penny stocks, the words “speculative” and “risky” are likely what first come to mind. Most stocks trading at single-digit prices, whether growth stocks or value stocks, have a high-risk, high-potential-return vibe. Yet, while these types of plays make up the bulk of this category, there are a few cheap dividend stocks under $5 per share.

Depending on your investment objectives, these may make for better additions to your portfolio than your standard “moonshot” penny stock. Why? Their high yields could help these investments deliver steady returns.

Additionally, they may have less downside risk than non-dividend-paying penny stocks. Consistent dividends are a sign of consistent profitability. And a stable underlying business could mean their stocks are subject to fewer wild price swings.

That’s the case here with each stock listed. These five cheap dividend stocks under $5 per share offer worthwhile dividend payouts and could experience gradual price appreciation, either due to a market re-rating or from catalysts playing out. Consider each one a potential buy at current price levels.

ABEV Ambev $2.85
KGC Kinross Gold $3.47
MFG Mizuho Financial Group $2.37
PBI Pitney Bowes $3.27
TEF Telefonica SA $4.38

Ambev SA (ABEV)

Source: rmcarvalhobsb /

Ambev SA (NYSE:ABEV) is a Brazil-based brewer that operates in Latin America and Canada. It is majority owned by Anheuser-Busch InBev (NYSE:BUD), which owns approximately 62% of the company’s stock. You may be wondering why this publicly traded subsidiary is a better buy than its parent, especially as both names trade at similar forward earnings multiples (around 17x).

Both are also trying to turn themselves around after experiencing sluggish growth and pandemic headwinds. Yet, with its much higher dividend yield (3.9% for ABEV versus BUD’s 1% yield), ABEV stock may be the better buy. Investors can get paid while they wait for a turnaround.

That’s not all. While shares are down less than the broader market in the past year, they are down substantially over the past five years. Therefore, it’s not outside the realm of possibility that Anheuser-Busch Inbev eventually buys out minority shareholders at a premium to the current trading price.

Kinross Gold (KGC)

Source: T. Schneider /

Canada-based Kinross Gold (NYSE:KGC) operates gold mines around the world. This has been a tough year for shares, which are down around 40%.

The big jump in gold prices earlier this year due to Russia’s invasion of Ukraine only gave the stock a brief boost, as the miner was forced to sell its Russian assets due to sanctions. Furthermore, as the U.S. Federal Reserve’s rate hikes strengthened the U.S. dollar, gold has pulled back.

So, with these troubles, why buy Kinross?

It currently sports a solid 3.6% forward yield. Shares also trade at a heavily discounted valuation with a forward multiple of just 10x. The stock could make a big recovery if gold prices bounce back on a possible course reversal by the Fed, which may move to cut interest rates next year.

Mizuho Financial Group (MFG)

Source: TK Kurikawa / Shutterstock</…….


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