Dividend stocks are a great way to invest while also creating a source of passive income. Many dividend stocks pay out a dividend of 2% or greater. For those of us who aren’t day traders, investing is a long game. But it also helps to have money now. And some dividend stocks under $10 can give you some income over the years while you wait for the stock’s value to grow.
At the same time, many investors start with very little money. Of course, that is one of the reasons they start investing. But when you start with very little, you can’t afford stocks that cost hundreds of dollars per share.
If that sounds like you, don’t worry. Here are the best dividend stocks under $10 so you can start investing today:
- America First Multifamily Investors LP (Nasdaq: ATAX)
- Annaly Capital Management (NYSE: NLY)
- ASE Technology Holding Co. Ltd. (NYSE: ASX)
- Mitsubishi UFJ Financial Group Inc. (NYSE: MUFG)
- Pitney Bowes (NYSE: PBI)
Before we take a closer look at these stocks, let’s consider whether dividend stocks under $10 are a good investment. In particular, are these low-value dividend stocks a good investment?
Are Cheap Dividend Stocks a Good Investment?
In many cases, dividend stocks are real estate stocks, but not always. Of course, real estate provides consistent income in the form of a lease or rental payments. But real estate stocks are not the only ones that pay consistent dividends. There are plenty of other sectors represented as well, such as energy, technology, and financial services.
There are several advantages that come with dividend stocks, too. For one, these stocks tend to perform better during bull markets. That’s because stocks that don’t pay dividends may be falling during those times. Meanwhile, your trust dividend stocks continue to pay out.
On that note, dividend stocks can be less risky since they continue to pay dividends regardless of market conditions. This is one reason real estate works well since this sector is not cyclical in the same way consumer goods are.
And even though the dividend stocks under $10 on this list are cheap, the fact that they pay regular dividends shows they are on solid footing despite their low share price.
The Best Dividend Stocks Under $10
Now, let’s take a closer look at each of these dividend stocks. As we will see, many of these stocks have very attractive dividends.
America First Multifamily Investors LP
Dividend yield: 7.01%
Right out of the gate, the word “multifamily” tells you this is a real estate stock. Indeed, America First is a mortgage financing company that invests in mortgage revenue bonds to finance multifamily and student housing. Thus, dividends come from rent payments in both multifamily and student housing facilities.
America First was founded in 1998 and already has a portfolio of about 12,000 rental units in 15 states. Its revenue for the quarter ending June 30 was $16.4 million, with total assets of $1.2 billion. Its six-month revenue was $30.8 million. And its share price has increased around 50% since last year. That makes this a no-brainer as a dividend stock under $10.
Annaly Capital Management
Dividend yield: 10.39%
Annaly Capital Management is a real estate investment trust (REIT) that purchases mortgage-backed securities. Those securities are backed by federal agencies such as Fannie Mae or Freddie Mac. Around three-quarters of its equity is in mortgage-backed securities. However, it does operate in other sectors, such as mortgage servicing rights and commercial mortgage-backed securities.
Annaly Capital Management has an expansive portfolio with $93 billion in total assets and three distinct businesses. On top of this, its stock price is up more than a dollar since last year. That makes this one of the best dividend stocks under $10 you can add to your portfolio… At least while it remains under the $10 mark.
ASE Technology Holding Co. Ltd.
Dividend yield: 4.45%
ASE Technology Holding is a relatively new company based in Taiwan. It was founded in April of 2018. ASE deals in the semiconductor sector, which only looks to be getting stronger in the year ahead. But instead of manufacturing its own chips, ASE packages and tests chips. This is as opposed to designing them itself. As such, it offers front-end engineer testing, wafer probing, and final testing.
ASE’s market cap currently fluctuates around $15 billion. Things look good for the company. Net income was shown to increase nearly 50% on its most recent earnings report. It ballooned to 10.34 billion NT$. And its operating income increased 75% to 7.6 billion NT$. With strong figures like these, it’s unlikely that ASE will remain a dividend stock under $10 for much longer.
Mitsubishi UFJ Financial Group Inc.
Dividend yield: 3.85%
Mitsubishi UFJ Financial Group is a financial services company based in Tokyo. Its parent organization, Mitsubishi Group, is the same outfit behind consumer products in the U.S. For its part, MUFG has a market cap of over $75 billion. It’s also worth noting that MUFG is a well-established company. It has been around since 1880. It provides banking services in several sectors, including retail banking, business banking, and trust assets.
MUFG has been doing quite well financially, too. Its stock price is up, and so are its earnings. Its most recent earnings report shows net income up more than 108%, to ¥383.03 billion. And its net profit margin is up over 101% to reach 29.38%. That makes this a dividend stock under $10 worthy of just about any portfolio.
Dividend yield: 2.83%
Founded in 1920, Pitney Bowes is an old-school company that has managed to stay relevant thanks to an evolving business model. Once involved in printing and mailing, it has more recently been known as an e-commerce and digital marketing company. At one point, it focused more on direct and mail marketing. But an already digital world was catapulted toward e-commerce due to the coronavirus. Pitney Bowes has successfully adapted and become a strong digital firm.
As a result, its stock price is up more than 15% over the past year. And with a market cap of more than $1 billion, the future looks bright for PBI. While its net income is still modest, it was up nearly 700% as of its most recent earnings call. Diluted EPS and net profit margin show similarly strong gains of 650% and 652%, respectively. It should be noted that its net profit margin was negative in the first quarter of 2021. But each of its last two quarters in 2020 showed a modest profit.
The Bottom Line of Dividend Stocks Under $10
Dividend stocks provide a great way to boost your income. It’s a passive approach that’s easy to start. Especially with these dividend stocks under $10. Having a steady stream of income added to your portfolio is an excellent way to start paving a path towards financial freedom.
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