by InvestorPlace Staff | August 24, 2010 11:36 am
Penny stocks and low priced stocks are one way investors can cope with investing woes in a time of economic downturn. Buying good stocks at bargain prices can be a profitable value investing strategy. But what if you can couple the quest for cheap penny stocks with the push for income and reliable dividends?
Believe it or not, there are a number of companies like this out there. These cheap investments may trade for just a few bucks a share, but also deliver big dividends to the tune of +5%.
Here are 13 such stocks that are trading under $5 per share and offering more than a 5% dividend yield:
Market Cap: $213.36 million
Dividend Yield: 7.2%
Annual Dividend Payment: $0.25
Advance America, Cash Advance Centers, Inc. (NYSE: AEA[1]) provides cash advance services, installment loans and lines of credit – a so-called “payday lender.” Its cash advances are small-denomination, short-term and unsecured advances due on the customer’s next payday. This consumer finance stock will not break the bank since it is trading at $3.45 per share, and it boasts a 7.2% dividend yield for investors to enjoy generous returns for a minimal investment. This is of course assuming AEA continues to pay dividends as it has since 2005. Regulation is tightening in some regions on payday lenders, but in times like these companies like AEA serve a valuable role to some cash-strapped Americans.
Market Cap: $3.43 billion
Dividend Yield: 17.5%
Annual Dividend Payment: $0.68
Chimera Investment Corporation (NYSE: CIM[2]), a real estate investment trust, invests in residential mortgage backed securities, residential mortgage loans, real estate-related securities and various other asset classes in the United States. CIM flopped big time after the financial crisis and mortgage meltdown, from almost $20 a share in early 2008 to under $4 now. But the company has been fairly stable for a year, moving sideways. Though shares haven’t delivered much value, the whopping 17.5% dividend yield from Chimera is a very tempting opportunity for dividend hungry investors.
Market Cap: $291.18 million
Dividend Yield: 10.2%
Annual Dividend Payment: $1.74
China Nepstar Chain Drugstore Ltd. (NYSE: NPD[3]) operates more than 2,700 retail drugstores located in 12 provinces and 76 municipalities in the People’s Republic of China. NPD shares have been rewarding loyal investors fro two years now with dividends rounding out to a whopping 10.2% annual yield. Add to that an impressive gross margin and the fact that this drugstore company beat EPS estimates during two of the past four quarters, and you get a small cap stock that could have big potential for your portfolio.
Market Cap: $950 million
Dividend Yield: 6.2%
Annual Dividend Payment: $0.28
DCT Industrial Trust Inc. (NYSE: DTC[4]), formerly known as Dividend Capital Trust Inc., is a publicly owned real estate investment trust that engages in the ownership, operation and development of real estate properties. The Colorado-based company has seen a slight dip in share price this summer, but DCT has paid investors a dividend since 2007 and is giving stakeholders a 6.2% dividend return on each share held in the company.
Market Cap: $424 million
Dividend Yield: 10.3%
Annual Dividend Payment: $0.24
Himax Technologies, Inc. (NASDAQ: HIMX[5]) engages in the design, development and marketing of semiconductors used as components of flat panel displays. The company’s principal products are display drivers for large-sized thin film transistor liquid crystal displays, which are used in desktop monitors, notebook computers, televisions, mobile handsets and car navigation displays. This small cap company seems to be in the right industry to capitalize the strength of the tech sector and electronics, and it’s 10.3% yield or $0.24 per share is also enticing for investors.
Market Cap: $120 million
Dividend Yield: 5.2%
Annual Dividend Payment: $0.20
Horizon Lines (NYSE: HRZ[6]) is the largest Jones Act domestic container shipper in the U.S., operating with 20 vessels and about 18,500 cargo containers. The marine cargo company has been paying its shareholders quarterly dividends since 2005 and HRZ outperformed EPS estimates by a wide margin in the second quarter this year. With share prices under $4 and with a yield of 5%, some investors may want to hitch a ride on this ocean transporter.
Market Cap: $216 million
Dividend Yield: 5.8%
Annual Dividend Payment: $0.28
Hot Topic Inc. (NASDAQ: HOTT[7]) sells premium clothing to teens and young adults – not exactly a business you’d associated with high dividend stocks. But the fashion retailer is currently offering a quarterly dividend of $0.07 per share and is just coming off a 52-week low last week, creating the opportunity for investor to get in at the bottom with a yield of nearly 6% at current valuations under $5.
Market Cap: $260 million
Dividend Yield: 5.8%
Annual Dividend Payment: $0.24
Headquartered in Indianapolis, Kite Realty Group Trust (NYSE: KRG[8]) is a full-service, vertically integrated real estate investment trust (REIT) focused on the development, construction, acquisition, ownership and operation of neighborhood and community shopping centers in high-growth markets. KRG has been paying dividends since 2004 and although yields have decreased as share values have dropped in the past year, the company still maintains a healthy annual yield of 5.8% for investors to tuck away.
Market Cap: $250 million
Dividend Yield: 12.1%
Annual Dividend Payment: $0.40
NorthStar Realty Finance Corp. (NYSE: NRF[9]) is a real estate finance company, which focuses primarily on originating, investing in and managing commercial real estate debt and net lease properties. NRF stock has managed to outperform the broader markets in August, and its 12.1% dividend yield makes shares very attractive to some investors. While the commercial real estate market is still seeing significant trouble right now, investors may want to take a chance on this high yield dividend stock.
Market Cap: $130 million
Dividend Yield: 9.4%
Annual Dividend Payment: $0.28
Primedia Inc. (NYSE: PRM[10]) engages in the production and distribution of consumer directories for apartments and rental properties through online, print and mobile platforms. Best known for its ApartmentGuide.com and Rentals.com sites, PRM is also known for connecting investors with quarterly dividend since 2007. With shares trading at under $3 and boasting a nearly 10% dividend yield, PRM shares could be worth another look for those looking to get some guaranteed returns in their portfolio.
Market Cap: $3.12 billion
Dividend Yield: 6%
Annual Dividend Payment: $0.20
With operations in Taiwan, Siliconware Precision Industries (NASDAQ: SPIL[11]) is one of the world’s largest contract semiconductor packaging and testing companies. Since late last week SPIL share began to diverge from the trends of the broader markets and actually gain some ground in a climb to just under $5 per share. This semiconductor company has failed to live up to earnings estimates from two consecutive quarters but it has not failed to pay dividends to its investors since 2004. The current yield is 6% for SPIL stock.
Market Cap: $310 million
Dividend Yield: 6.6%
Annual Dividend Payments: $0.29
Star Gas Partners, L.P. (NYSE: SGU[12]) operates as a home heating oil distributor and services provider in the United States that provides its services to residential and commercial customers. SGU shares are up more than +26% from this time last summer and the company began paying dividends in 2009. With a current yield of 6.6%, Star Gas shares have relatively low volatility.
United Online Inc. (UNTD)
Market Cap: $430 million
Dividend Yield: 8.2%
Annual Dividend Payment: $0.40
United Online, Inc. (NASDAQ: UNTD[13]) provides consumer products and services over the Internet, primarily in the United States and internationally. Its businesses include FTD florists, the MyPoints.com rewards program and NetZero internet access among others. Annual dividend amount per year remains steady at $0.40 from last year despite bearish technical indicators and stock performance well below the broader markets over the course of the past three months. UNTD shares are dangerously close to a 52-week low, but the dividend yield may be enticing to investors.
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