Back to top

Image: Shutterstock

5 Cheap Dividend Stocks to Buy and Hold This Year

Read MoreHide Full Article

The market closed at a record high on the last day of 2020. However, this doesn’t mean that the coronavirus worries are behind us. The United States continues to witness a surge in coronavirus cases and the recent discovery of the new variant of the virus has fuelled investor concerns, making the market extremely volatile.

Hence, it is of utmost importance to create a portfolio of cheap dividend stocks which not only deliver consistent income but also provide protection against market volatility.

Uncertainties Remain

Although the rolling out of coronavirus vaccines and the massive pandemic relief bill have brightened prospects of a strong economic rebound by late-2021, the pandemic is expected to keep markets volatile till enough doses of the vaccines are in place.

Notably, since late-2020, the number of new coronavirus cases in the United States has started to pick up rapidly, making things rough for the economy and the labor market, at least in the near term. Thus, many analysts strongly believe that through early-2021, the jobless claim, a proxy for layoffs, will remain high amid the virus resurgence and business closures.

Dividend Stocks to the Rescue

Buying and holding good dividend stocks is a great investment strategy amid the market turmoil. Stocks with a solid dividend growth history for the past several years are generally less exposed to market volatility and thus act as a hedge against the challenges and uncertainties plaguing the market.

Dividend investors can navigate through the choppy market with fundamentally strong stocks which are relatively cheap, have good sales and dividend growth history and are currently offering healthy dividend yields.

Employing our proprietary stock screener, we have zeroed down on five stocks with market capitalization of more than $5 billion. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a Value Score of A or B. The companies offer a handsome dividend yield of more than 3% and have five-year historical dividend and sales growth greater than zero. This signifies stocks with a solid dividend growth history along with a strong record of revenue growth.

Our Picks

Headquartered in Memphis, TN, International Paper Company (IP - Free Report) , is a leading paper and packaging company. The #1 Ranked stock carries a Value Score of B and offers a dividend yield of 4.1%, significantly higher than the S&P 500’s 1.4%. Notably, in the past 60 days, the company witnessed upward earnings estimate revisions for 2021.

Ternium SA (TX - Free Report) , based in Luxembourg, is primarily involved in manufacturing and processing steel products. The Zacks Rank #1 stock has a Value Score of A and offers a dividend yield of 4.1%. Notably, the company has seen upward earnings estimate revisions for 2021 in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Seoul, South Korea, Shinhan Financial Group Co., Ltd. (SHG - Free Report) is a leading provider of financial products and services. The stock, with a Zacks Rank of 1, has a Value Score of B and offers a dividend yield of 3.9%. Notably, the company has seen upward earnings estimate revision for 2021 in the past 60 days.

Regions Financial Corporation (RF - Free Report) , headquartered in Birmingham, AL, is a leading provider of banking and associated services. The #2 Ranked stock has a Value Score of B and offers a dividend yield of 3.9%. Notably, the company has seen upward earnings estimate revisions for 2021 in the past 60 days.

Based in Charlotte, NC, Nucor Corporation (NUE - Free Report) is primarily involved in manufacturing steel and steel products. The Zacks #2 Ranked stock has a Value Score of B and offers a dividend yield of 3.9%. Notably, the company has seen upward earnings estimate revisions for 2021 in the past 60 days.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>