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5 Cheap Dividend Stocks to Buy and Retain for 2023
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The Wall Street has seen jitters from the adverse macroeconomic scenarios in 2022, including rising inflation, commodity price increases, supply chain disturbances, Fed’s strategy of interest rate hikes and, not to forget, the Russia-Ukraine tussle. This has dragged the stock prices of many companies in 2022, incurring portfolio losses for many investors. While Fed’s recent interest announcement has brought solace, it is still difficult to predict the market’s future movement.
In a jittery market, it is wise to constantly re-evaluate one’s portfolio holdings and shuffle them by picking market-relevant stocks poised for future growth. Here, dividend-paying stocks turn out to be a good choice. Stocks paying regular dividends are large, stable and well-established.
Companies generally payout dividends from their profits after securing enough funds for reinvestment in business operations, growth and expansion. This indicates that dividend-paying stocks are typically more secure and reliable.
The dividend aristocrats, companies with a history of increasing their dividends annually for the past 25 years, are safe investment options for the long term.
Although dividend stocks are reliable, a stock paying the highest dividend or having a high dividend yield may not always be a great option. A good way to evaluate a dividend stock is to analyze whether the dividend paid is stable. Also, companies with efficient management and a healthy balance sheet are considered good choices.
These S&P 500 stocks have a dividend yield of more than or equal to 3%, as well as a five-year historical dividend growth rate of more than 0. Additionally, a Value Score of A or B and consistent sales growth make these stocks attractive.
The above-mentioned combination is compelling for investors interested in owning well-known companies with a steady and long-term income based on stability amid volatility.
Conagra Brands (CAG - Free Report) : The Chicago-based leading branded food company of North America has been gaining from its premium edible products, with a refined focus on innovation. Conagra has been strongly committed to innovation, which is the key to the company’s success. Prudent innovations have been helping the company to modernize its portfolio and meet consumers’ changing needs. Some of the company’s new products have been top-performing in several categories, such as toppings, plant-based protein and single-serve meals. CAG’s efficient pricing initiatives have been offering respite amid the cost headwinds.
Conagra has an estimated long-term earnings growth rate of 7%. The company pays out a quarterly dividend of 33 cents ($1.32 annualized) per share, with a 3.40% yield at the current stock price. CAG’s payout ratio is 54%, with a five-year dividend growth rate of 11.23%. The company currently has a Zacks Rank #2 and a Value Score of A. (Check CAG’s dividend history here)
Radian Group (RDN - Free Report) : The Philadelphia, PA-based company is a credit enhancement company that supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services. It is focused on improving the mortgage insurance portfolio to drive long-term earnings growth. Business restructuring intensifies its focus on core business and services with higher-growth potential, ensuring a predictable and recurring fee-based revenue stream. Its strong capital position enables it to deploy capital for growth.
Radian has an estimated long-term earnings growth rate of 5%. The company pays out a quarterly dividend of 20 cents (80 cents annualized) per share, with a 4.18% yield at the current stock price. RDN’s payout ratio is 16%, with a five-year dividend growth rate of 248.38%. The company currently has a Zacks Rank #2 and a Value Score of A. (Check RDN’s dividend history here)
Lazard (LAZ - Free Report) : Based in New Orleans, Lazard is one of the world’s major financial advisory and asset management firms. The company specializes in offering solutions for complex financial and strategic challenges of a diverse set of clients around the world. Efforts to scale the Asset Management platform and introduce investment strategies are likely to enhance Lazard's competitive edge. Impressive revenue growth trends and cost-control efforts are expected to aid financials.
Lazard pays out a quarterly dividend of 50 cents ($2.00 annualized) per share, with a 5.43% yield at the current stock price. LAZ’s payout ratio is 40%, with a five-year dividend growth rate of 2.8%. The company currently has a Zacks Rank #2 and a Value Score of A. (Check LAZ’s dividend history here)
NiSource (NI - Free Report) : Merrillville, IN-based NiSource is an energy holding company. Together with its subsidiaries, the company provides natural gas, electricity and other products and services in the U.S. The company expects to invest $40 billion in modernizing infrastructure, further enhancing the reliability of natural gas and electric operations. NI continues to add clean assets to the portfolio and retire coal-based units. Nearly 75% of its investment is recovered within 18 months through rate hikes, which provides the company with funds to carry on infrastructure upgrades. NI is also likely to gain from efficient cost management over the long term.
NiSource has an estimated long-term earnings growth rate of 6.8%. The company pays out a quarterly dividend of 24 cents (96 cents annualized) per share, with a 3.41% yield at the current stock price. NI’s payout ratio is 69%, with a five-year dividend growth rate of 5.1%. The company currently has a Zacks Rank #2 and a Value Score of B. (Check NI’s dividend history here)
Citizens Financial Group (CFG - Free Report) : Headquartered in Providence, RI, Citizens Financial is one of the largest retail bank holding companies in the United States. The company benefits from growing loans and deposits. Its focus on revenue and efficiency initiatives is another tailwind. Efforts to enhance the deposit base and a strong loan pipeline indicate balance-sheet strength. Moreover, with its robust capital position, the Zacks Rank #2 company has expanded and diversified operations through various acquisitions.
Citizens Financial pays out a quarterly dividend of 42 cents ($1.68 annualized) per share, yielding 4.34% at the current stock price. CFG’s payout ratio is 35%, with a five-year dividend growth rate of 15.2%. It currently has a Value Score of B. (Check CFG’s dividend history here)
Citizens Financial Group, Inc. Dividend Yield (TTM)
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5 Cheap Dividend Stocks to Buy and Retain for 2023
The Wall Street has seen jitters from the adverse macroeconomic scenarios in 2022, including rising inflation, commodity price increases, supply chain disturbances, Fed’s strategy of interest rate hikes and, not to forget, the Russia-Ukraine tussle. This has dragged the stock prices of many companies in 2022, incurring portfolio losses for many investors. While Fed’s recent interest announcement has brought solace, it is still difficult to predict the market’s future movement.
In a jittery market, it is wise to constantly re-evaluate one’s portfolio holdings and shuffle them by picking market-relevant stocks poised for future growth. Here, dividend-paying stocks turn out to be a good choice. Stocks paying regular dividends are large, stable and well-established.
Companies generally payout dividends from their profits after securing enough funds for reinvestment in business operations, growth and expansion. This indicates that dividend-paying stocks are typically more secure and reliable.
The dividend aristocrats, companies with a history of increasing their dividends annually for the past 25 years, are safe investment options for the long term.
Although dividend stocks are reliable, a stock paying the highest dividend or having a high dividend yield may not always be a great option. A good way to evaluate a dividend stock is to analyze whether the dividend paid is stable. Also, companies with efficient management and a healthy balance sheet are considered good choices.
Our Choices
With the help of the Zacks Stock Screener, we have narrowed down on five cheap dividend stocks that sport a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
These S&P 500 stocks have a dividend yield of more than or equal to 3%, as well as a five-year historical dividend growth rate of more than 0. Additionally, a Value Score of A or B and consistent sales growth make these stocks attractive.
The above-mentioned combination is compelling for investors interested in owning well-known companies with a steady and long-term income based on stability amid volatility.
Conagra Brands (CAG - Free Report) : The Chicago-based leading branded food company of North America has been gaining from its premium edible products, with a refined focus on innovation. Conagra has been strongly committed to innovation, which is the key to the company’s success. Prudent innovations have been helping the company to modernize its portfolio and meet consumers’ changing needs. Some of the company’s new products have been top-performing in several categories, such as toppings, plant-based protein and single-serve meals. CAG’s efficient pricing initiatives have been offering respite amid the cost headwinds.
Conagra has an estimated long-term earnings growth rate of 7%. The company pays out a quarterly dividend of 33 cents ($1.32 annualized) per share, with a 3.40% yield at the current stock price. CAG’s payout ratio is 54%, with a five-year dividend growth rate of 11.23%. The company currently has a Zacks Rank #2 and a Value Score of A. (Check CAG’s dividend history here)
Conagra Brands Dividend Yield (TTM)
Conagra Brands dividend-yield-ttm | Conagra Brands Quote
Radian Group (RDN - Free Report) : The Philadelphia, PA-based company is a credit enhancement company that supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services. It is focused on improving the mortgage insurance portfolio to drive long-term earnings growth. Business restructuring intensifies its focus on core business and services with higher-growth potential, ensuring a predictable and recurring fee-based revenue stream. Its strong capital position enables it to deploy capital for growth.
Radian has an estimated long-term earnings growth rate of 5%. The company pays out a quarterly dividend of 20 cents (80 cents annualized) per share, with a 4.18% yield at the current stock price. RDN’s payout ratio is 16%, with a five-year dividend growth rate of 248.38%. The company currently has a Zacks Rank #2 and a Value Score of A. (Check RDN’s dividend history here)
Radian Group Inc. Dividend Yield (TTM)
Radian Group Inc. dividend-yield-ttm | Radian Group Inc. Quote
Lazard (LAZ - Free Report) : Based in New Orleans, Lazard is one of the world’s major financial advisory and asset management firms. The company specializes in offering solutions for complex financial and strategic challenges of a diverse set of clients around the world. Efforts to scale the Asset Management platform and introduce investment strategies are likely to enhance Lazard's competitive edge. Impressive revenue growth trends and cost-control efforts are expected to aid financials.
Lazard pays out a quarterly dividend of 50 cents ($2.00 annualized) per share, with a 5.43% yield at the current stock price. LAZ’s payout ratio is 40%, with a five-year dividend growth rate of 2.8%. The company currently has a Zacks Rank #2 and a Value Score of A. (Check LAZ’s dividend history here)
Lazard Ltd Dividend Yield (TTM)
Lazard Ltd dividend-yield-ttm | Lazard Ltd Quote
NiSource (NI - Free Report) : Merrillville, IN-based NiSource is an energy holding company. Together with its subsidiaries, the company provides natural gas, electricity and other products and services in the U.S. The company expects to invest $40 billion in modernizing infrastructure, further enhancing the reliability of natural gas and electric operations. NI continues to add clean assets to the portfolio and retire coal-based units. Nearly 75% of its investment is recovered within 18 months through rate hikes, which provides the company with funds to carry on infrastructure upgrades. NI is also likely to gain from efficient cost management over the long term.
NiSource has an estimated long-term earnings growth rate of 6.8%. The company pays out a quarterly dividend of 24 cents (96 cents annualized) per share, with a 3.41% yield at the current stock price. NI’s payout ratio is 69%, with a five-year dividend growth rate of 5.1%. The company currently has a Zacks Rank #2 and a Value Score of B. (Check NI’s dividend history here)
NiSource, Inc Dividend Yield (TTM)
NiSource, Inc dividend-yield-ttm | NiSource, Inc Quote
Citizens Financial Group (CFG - Free Report) : Headquartered in Providence, RI, Citizens Financial is one of the largest retail bank holding companies in the United States. The company benefits from growing loans and deposits. Its focus on revenue and efficiency initiatives is another tailwind. Efforts to enhance the deposit base and a strong loan pipeline indicate balance-sheet strength. Moreover, with its robust capital position, the Zacks Rank #2 company has expanded and diversified operations through various acquisitions.
Citizens Financial pays out a quarterly dividend of 42 cents ($1.68 annualized) per share, yielding 4.34% at the current stock price. CFG’s payout ratio is 35%, with a five-year dividend growth rate of 15.2%. It currently has a Value Score of B. (Check CFG’s dividend history here)
Citizens Financial Group, Inc. Dividend Yield (TTM)
Citizens Financial Group, Inc. dividend-yield-ttm | Citizens Financial Group, Inc. Quote