It’s very easy to find inexpensive stocks that also bear dividends. It’s much more difficult to ascertain whether those stocks will continue to move downward or rebound. That’s why it makes sense to invest in firms that are very well established when searching for cheap dividend stocks.
Such firms have slim chances of suffering a prolonged downturn. They are also nearly certain to continue paying dividends.In other words, they are pretty safe and will provide income for investors who have the patience to chase a rebound. Let’s take a look at three such names which offer income, well-established names, and near certain rebound given a reasonable time horizon.
Pfizer (PFE)
Pfizer (NYSE:PFE) continues to move away from its covid era success and into a post pandemic landscape that has punished its stock. The company’s recent earnings tell the story clearly.
Last year, revenues fell by 41% due to an expected decline in Comirnaty and Paxlovid sales. Per share earnings fell by 93% over the course of 2023. As bad as those figures appear, Pfizer did beat Wall Street expectations with the report. The company is essentially in a reset. However, it did confirm previous guidance for 2024 which should instill some confidence in investors.
Pfizer’s next target will be oncology revenues. The company completed its acquisition of Seagen for its world class oncology portfolio.
Pfizer is also continuing to develop a weight loss therapeutic to rival those from Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO). The company has not had early success with its candidate drug, but continues to direct resources to its development.
Income investors could do a lot worse than Pfizer at the moment. The company is still flush with cash from its pandemic era success. Its dividend currently yields more than 6%, and it remains one of the leading names in the pharmaceutical space. There are many, many worse bets that investors could make at the moment. You can see why this made our list of cheap dividend stocks.
3M (MMM)
3M (NYSE:MMM) last reduced its dividend in 1959. That places the stock amongst a vaunted group of equities known as the dividend kings. So, despite multiple legal troubles, the company is almost certain to maintain that dividend at all costs.
Those legal woes include a settlement that included a payout of more than $10 billion dollars for water contamination. Those legal troubles also include a $6 billion dollar payout for defective earplugs provided to the military.
Those troubles have tarnished 3M reputations while also affecting its financial position. There’s little arguing that the company has been weakened substantially. However, that provides an opportunity for investors who can look past its troubles. Those who do will be rewarded with substantial income in the form of a dividend yielding more than 6.5% at the moment.
3M’s cash position was $1.4 billion greater than expected at the end of the fourth quarter. That further suggests that the company’s troubles were overblown and brighter days are ahead. This is one of the top, cheap dividend stocks on the market.
Albemarle (ALB)
Investors should really consider Albemarle (NYSE:ALB) stock at the moment primarily because it’s cheap, and, secondarily, because of its dividend. Just about every investor is well aware that lithium stocks are very cheap at the moment. Albemarle is a great example of such opportunities. It is the largest lithium firm overall, and is almost assured to rebound sooner or later.
Investing in Albemarle is really about the pricing upside. Shares currently trade for less than $120 due to the price collapse of lithium. Yet, it is expected that prices will rise to the $185 range in the next year or so. Some analysts expect that share prices could rise as high as $288. Investors clearly expect that that’s where the brunt of potential returns will be made.
Meanwhile, Albemarle does include a dividend yielding a modest 1.35% at the moment. The company just released earnings on Feb. 14 which showed record sales of $9.6 billion, up 31%. The company isn’t out of the woods yet, but those results strongly suggest that brighter days are certainly ahead. If you are looking for cheap dividend stocks, start here.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
