Dividend Stocks Under $10 Worth Buying
Karen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Dividend income doesn’t have to belong exclusively to the rich. There are many solid stocks trading under $10 that pay excellent dividends just waiting to be discovered. These three small cap stocks also have a lot of room to grow, making them equally attractive to investors seeking growth along with dividend income.
Each of the companies discussed below share several traits: all have a dividend yield of 2.2% or higher, have a market cap of at least $200 million, are currently trading under $10 a share, post solid revenues, and have been in business for at least five years.
The first stock to consider is Aceto (NASDAQ: ACET). Started in 1947, Aceto markets and distributes pharmaceuticals and specialty chemicals used in health science and agriculture. The company’s market cap is $234.93 million, and their reported 2011 revenue was $454.64 million.
Aceto has an excellent dividend payment history and paid their first dividend in 1988. The company currently pays a $.20 dividend and has a 2.20% dividend yield. The stock is trading around $8.76 and the 52-week range is $4.88 - $9.99.
Aceto’s fiscal year revenue increased from $346.6 million as of June 29, 2010, to $412 million for the same period 2011, to $454.6 million in 2012. Fiscal year net income rose from $6.581 million in 2010 to $8.968 million, in 2011. Net income for the first nine months ending March 30, 2012, reported at $13 million, has already exceeded the past two years’ net income annual figures. Aceto reports cash of $28.15 million against debt of $50.73 million, with a ROE of 10.07%. Analysts rate Aceto as a strong buy, and project next year’s revenue to hit $515.32 million.
PDL BioPharma (NASDAQ: PDLI) manages intellectual property and royalty bearing assets. The company also has a patent portfolio of “humanized antibodies,” a combination of human and mouse components used to treat cancer and other serious diseases. The company was started in 1986 and has a market cap of $1.01 billion. Their 2011 reported revenue came in at $359.83 million.
PLDI changed their name from Protein Design Labs in 2006. The company has been paying dividends since 1986, and the current $0.60 dividend is a generous 8.50% yield. The stock trades around $7.20 a share and the 52-week range is $5.15 - $7.24.
Annual revenue has risen from $345 million as reported on December 31, 2010, to $362 million on December 31, 2011. Net income rose from $91.9 million to $199.4 million, respectively. PLDI is on track to beat these figures, reporting revenue for the first six months of 2012 at $203 million and net income of $113.7 million. The company states their cash as $228 million against debt of $327.5 million, and reports ROA at 77.87%. PLDI is rated as a strong buy and revenue for 2013 is projected at $427.55 million.
Founded in 1910, Stewart Enterprises (NASDAQ: STEI) operates in “the quiet trade.” Through their subsidiaries, the company provides funeral and cemetery products and services in 24 U.S. states and Puerto Rico. They currently manage and operate 218 funeral homes and 141 cemeteries. Stewart Enterprise’s market cap is $614.84 million and the company earned $511.16 million in revenue for 2011.
The company started paying dividends in 1992 and currently pays a $0.16 dividend, making it a 2.20% dividend yield. The stock trades at $7.09 and has a 52-week range of $4.92 - $7.78.
Annual revenue and net income continue to grow. For year ended October 20, 2011, the company reported revenue of $512.7 million and net income of $38.6 million as compared to $499.9 million in revenue and $30.1 million net income for the same period 2010. For the first six months of the companies’ fiscal year, revenue was reported as $257.4 million and net income at $17.281 million. Current cash is stated as $62.83 million against debt of $319.83 million, with a ROE at 8.99%. Analysts rate Stewart Enterprises as a strong buy due partly to the graying of America, and project next year’s revenue at $528.06 million.
In today’s difficult economy, small cap stocks are one way investors can earn dividend income on a budget. Because of their growth potential, investors may one day find these stocks yielding far more than their initial investment.
kprogers has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.