Maximize Your Returns: 3 Cheap Stocks With Juicy Dividends


  • These are the undervalued and high-yield dividend stocks to buy for healthy total returns in the next 24 months.
  • Aker BP ASA (AKRBF): Aker has 2P reserves of 1,716 mmboe with a full portfolio break-even at $35 to $40 per barrel.
  • Barrick Gold (GOLD): Bullish trends and further upside for the precious metal will translate into robust cash flows for this gold miner.
  • AT&T (T): T has continued deleveraging, backed by healthy cash flows and sustained improvement in key business metrics.
high-yield dividend stocks - Maximize Your Returns: 3 Cheap Stocks With Juicy Dividends

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After the recent correction of the S&P 500 index below 5,000, the markets have bounced back strongly. In my view, weak GDP data for Q1 2024 has triggered optimism about multiple rate cuts in the next 12 months. The overall view for the market is, therefore, positive, and it will be difficult to find value stocks as the broad markets continue to trend higher. However, for now, there are undervalued high-yield dividend stocks to buy that can deliver robust total returns in the next two years.

I have used the bottom-up approach to scan for undervalued dividend stocks. So, the focus is on quality names with strong fundamentals rather than ideas driven by industry tailwinds.

I must add that the valuation gap exists in these stocks because they have been ignored by the markets. Once these names are in the limelight, returns will likely be stellar. I would look at 60% to 80% in total returns from these ideas for the given investment horizon.


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Aker BP ASA (OTCMKTS:AKRBF) is among the undiscovered high-yield dividend stocks to buy. AKRBF stock has remained sideways in the last 12 months and looks undervalued, considering the asset potential. Further, the stock offers a juicy dividend yield of 9.45%.

As an overview, Aker BP is an oil & gas exploration company with a focus on the Norwegian Continental Shelf. As of 2023, the company reported 2P reserves of 1,716 mmboe and 2C contingent resources of 809 mmboe. An important point to note is that the portfolio has an attractive break-even oil price of $35 to $40 per barrel.

Even if oil trades at $80, Aker is positioned to report robust cash flows. With potential expansionary policies in the cards, I am bullish on oil trending higher. That is one reason to be bullish on AKRBF stock for the coming quarters.

It’s also worth noting that Aker ended Q1 2024 with a liquidity buffer of $6.6 billion. Further, with a low leverage ratio of 0.2, Aker has high financial flexibility for aggressive exploration activities. I must add that with robust free cash flows, dividend growth will likely remain healthy.

Barrick Gold (GOLD)

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Gold continues to trade above $2,300 an ounce after a good rally for year-to-date. With potential rate cuts in the second half of 2024, the precious metal will likely surge above $2,500 an ounce. Therefore, I believe gold mining stocks are attractive. Barrick Gold (NYSE:GOLD) is among the undervalued high-yield dividend stocks to buy.

In the last 12 months, GOLD stock has trended lower by 18%. At a forward price-earnings ratio of 15.7, the downside is capped. On the other hand, the upside potential is significant for this 2.40% dividend yield stock. I must add that I expect healthy dividend growth as cash flows swell on the back of higher realized gold prices.

For Q1 2024, Barrick Gold reported EBITDA and operating cash flow of $907 million and $760 million, respectively. That implies an annualized OCF potential of $3 billion. With gold trending higher, that is a conservative estimate. Further, with a high-quality reserves base, Barrick has visibility for steady production growth and cash flow upside.

AT&T (T)

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AT&T (NYSE:T) stock has been ignored by investors and has remained sideways in the last 12 months. T stock is, however, deeply undervalued at a forward price-earnings ratio of 7.6 and offers a dividend yield of 6.53%. With improving business and financial metrics, I expect T stock to trend higher. Further, dividends are secure, considering the free cash flow potential.

The first point to note is that AT&T has guided for free cash flow of $17 to $18 billion for 2024. That provides flexibility for dividends and deleveraging. AT&T is on track to reduce leverage to 2.5x in the first half of 2025.

Further, there has been a steady uptrend in the company’s postpaid phone subscribers and fiber subscribers. In addition, the average revenue per user has improved. If this trend sustains, there is a strong case for continued upside in free cash flows. Therefore, with improvement in credit metrics, I expect T stock to trend higher.

On the date of publication, Faisal Humayun 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 Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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