The quest for reliable income streams in today’s volatile market often leads investors to cheap dividend stocks. These are stocks with a low P/E ratio and a healthy dividend yield, offering the dual benefit of capital appreciation and regular income payments.
The “sell in May and go away” phenomenon presents a particularly attractive window for acquiring these hidden gems. Additionally, investors can diversify away from some of the high-flying tech stocks. With careful analysis and a long-term perspective, investing in cheap dividend stocks could pave the way for a more resilient and rewarding portfolio.
Now, let’s discover the top cheap dividend stocks to snap up in May!
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM) is the largest bank in the United States, characterized by its stability and consistent dividend payments. The company’s diverse business, ranging from consumer banking to asset management, has allowed it to weather many storms and maintain a strong financial position.
JPMorgan is known for its strong financial position employed by its long-time CEO, Jamie Dimon. Since its inception, Dimon has prided himself in building a ‘’fortress balance sheet.’’ Over the last 12 to 18 months, JPMorgan has benefited tremendously from higher interest rates. The company acquired First Republic consumer loan assets for pennies on the dollar, while strengthening its liquidity. The company also saw record net interest income in the 2023 fiscal year, and now has approximately $1.44 trillion in cash on hand. JPM stock currently has a P/E ratio of 12, and offers a yield of 2.31%. Moreover, its diversified business model, fortress balance sheet and history of double-digit dividend growth positions them well for the long term.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) is the world’s largest producer of renewable energy from wind and the sun. The company’s strong track record of dividend growth and its focus on sustainability make it an attractive option for long-term investors.
NextEra is leading the energy transition offering investors the best of both worlds for dividend growth and capitalization appreciation. The past year has been transformative for the company, and 2024 is projected to be a strong year. Its wholly-owned subsidiary, Florida Power & Light (FPL), is ramping up its renewable energy capacity at scale. NextEra Energy Resources is also not slowing down, adding approximately 2,765 megawatts of new renewable and storage capacity to its backlog in the first quarter. Furthermore, CEO John Ketchum, forecasts 8.3% EPS growth in FY24, while maintaining its 10% dividend growth through 2026. With a current yield of 2.79%, NEE stock remains one of the best cheap dividend stocks to buy in May.
Deere & Co (DE)
Deere & Co (NYSE:DE), the world’s leading manufacturer of agricultural machinery, is another strong contender for the top cheap dividend stocks to buy. The company’s strong dividend growth and resilience in the face of economic challenges have contributed to its success over the last decade.
One of the primary reasons Deere stock is appealing is its attractive dividend yield, low P/E ratio and low payout ratio. For income-focused investors, it becomes paramount to search for companies that can consistently grow their dividends. In addition to its attractive dividend yield, Deere’s strategic positioning within the agricultural industry further bolsters its investment case. While the stock is highly cyclical, its strong moat and cash flows from operations position it to weather uncertainties within the economy. Additionally, the company is undoubtedly set to benefit from the ramp of global infrastructure spending over the next decade. As of May 2024, DE stock offers a yield of 1.44%. The company has also averaged about a 10% CAGR in its dividend over the last decade.
On the date of publication, Terel Miles did not hold (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.
