Under conventional thinking, robust capital gains don’t align with robust passive income but you haven’t seen these dividend stocks under $10. That’s right – these compelling plays are easy on the eyes and on the wallet.
True, if you’ve ever perused the financial publication space, the search for passive income tends to focus on the usual suspects. And the same goes for enterprises with high capital gains potential. But if you think about it, many publicly traded companies should be able to do both. Businesses should never stop growing and they should never take their shareholders for granted.
Also, just because you want a decent yield doesn’t mean that you have to pay up the nose for storied but expensive blue chips. Instead, these overlooked entities check so many boxes that retail investors are looking for. Without further delay, below are dividend stocks under $10.
Himax Technologies (HIMX)
A fabless semiconductor manufacturer, Himax Technologies (NASDAQ:HIMX) practically sells itself. Specifically, the company provides display imaging processing technologies to consumer electronics, automotive solutions and many other applications. According to Grand View Research, the global display image processing market size reached a valuation of $5.16 billion in 2022.
Further, analysts there estimate that the segment could expand at a compound annual growth rate (CAGR) of 19.7% from 2023 to 2030. At the forecast culmination, the ecosystem could be worth $21.73 billion. Given that Himax’s market capitalization is under $1 billion, the sky’s the limit for HIMX.
Even better, Himax represents one of the dividend stocks under $10. At the moment, the company offers a very generous forward yield of 8.81%. On the financial side, the technology firm prints an earnings multiple of 12.76X without non-recurring items (NRI). That’s well lower than the sector median stat of 29.3X.
Lastly, Robert W. Baird’s Tristan Gerra rated HIMX stock a “buy” with a $7 price target. The previous high from Credit Suisse sees shares running up to $8.
Jerash (JRSH)
An apparel manufacturing company, Jerash (NASDAQ:JRSH) makes and exports ready-made sport and outerwear clothing for some of the world’s leading brands. Per its website, Jerash owns six factories and four warehouses employing approximately 5,700 people. Further, its annual capacity stands at more than 14 million pieces.
To be sure, the consumer discretionary environment faces questions due to years of high inflation and high interest rates. However, the key benefit for JRSH stock is that the underlying company serves a product category that’s reasonably affordable. If instead we were dealing with big-ticket items, I would probably be much more concerned.
Better yet, any lingering concerns can be assuaged with the passive income. Jerash qualifies as one of the dividend stocks under $10, featuring a forward yield of 6.47%. This yield soars above the consumer discretionary sector’s average yield of only 1.89%.
As well, analysts anticipate great things from JRSH stock in terms of capital gains. Over the next 12 months, they see shares hitting $5, representing a significant lift from current levels.
VAALCO Energy (EGY)
Headquartered in Houston, Texas, VAALCO Energy (NYSE:EGY) focuses on hydrocarbon exploration or the upstream component of the energy value chain. At the moment, the hydrocarbon space faces some upside concerns. Despite coordinated efforts among oil-producing nations to artificially bid up the price of crude, these initiatives have largely failed. As a result, EGY has been trending aimlessly over the past year.
Nevertheless, I anticipate EGY stock to benefit from broader economic trends. Specifically, the U.S. jobs market continues to impress onlookers, with the monthly print landing consistently above expectations. Further, employment growth occurs in areas such as healthcare, education, and government – avenues that generally require in-person operation. That could mean more consumption, which should boost Vaalco.
For betting on the enterprise, the company offers a forward yield of 5.72%. Plus, with a single-digit price tag, it falls under the category for dividend stocks under $10.
Finally, analysts rate EGY stock a consensus moderate buy with an $8.62 price target. Notably, the high-side target hits just under $10.
On the date of publication, Josh Enomoto 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.
