Passive income usually denotes high-priced blue chips but certain cheap dividend stocks to buy can offer the best of all worlds. Yes, they’re risky and you don’t want to put all your eggs in one basket. But they can add excitement to an otherwise boring topic.
First, cheap dividend stocks to buy are exactly that – cheap. Here, I targeted securities that closed under $20 per share for the week ending March 1, just to keep the comparisons nice and tidy.
Second, in part because they’re so modestly priced, these cheap dividend stocks to buy offer better upside potential. You might be waiting a long time for your favorite consumer goods stalwart to print a double digital return for the year. With these ideas, you might get that within a quarter or less.
Third and finally, these ideas are generally under the radar. Therefore, if a market slowdown materializes, overexposure to the heavily featured ideas may become problematic. Of course, there are risks with any approach in the market. However, if you don’t mind a bit of speculation, these cheap dividend stocks to buy could be right for you.
Limoneira (LMNR)
A public limited agribusiness and real estate development company, Limoneira (NASDAQ:LMNR) presents an intriguing case for cheap dividend stocks to buy. Per its public profile, Limoneira represents one of the largest lemon producers in the world. Given its focus on a key segment of the agricultural industry, LMNR stock enjoys significant relevance. No matter what happens in the market, we’ve got to eat.
For the week ending March 1, shares gained just under 1%, closing at $17.97. It’s had a rough start to the year, down double-digit percentage points. However, since May 2022, LMNR stock has printed a series of rising lows, which is encouraging. Regarding passive income, the company carries a forward dividend yield of 1.67%.
Admittedly, it’s not the most generous yield. However, here’s the thing: analysts expect a fairly bright future for the enterprise. Specifically, they anticipate 2024 revenue to reach $199.19 million on average. That would be 10.7% above last year’s tally. And 2025 sales could land at just under $217 million.
Also, analysts rate shares a unanimous strong buy with a $23 average price target.
Cenovus Energy (CVE)
A Canadian integrated oil and natural gas company, Cenovus Energy (NYSE:CVE) might seem out of sorts given the broader narrative. Basically, political and ideological winds favor green and sustainable solutions. However, those solutions face significant problems, particularly amid slowing sales of electric vehicles. Therefore, entities like Cenovus have a chance, making CVE one of the cheap dividend stocks to consider.
You don’t have to take my word for it. Instead, covering experts of CVE stock believe that on average, Cenovus will print revenue of $40.18 billion by the end of 2024. That would come out to a 4.5% increase over the prior year’s result. Looking ahead to 2025, analysts project that sales will land at just under $41 billion.
Again, these are average estimates. On the high side, we’re talking about sales of $42.6 billion and $43.88 billion in 2024 and 2025, respectively. Also, analysts anticipate growth in earnings per share in both projected years.
Therefore, Cenovus’ forward yield of 2.33%, while low, should be very sustainable. That should be especially true given the lowly payout ratio of 17.3%.
Barrick Gold (GOLD)
A tricky but intriguing idea for cheap dividend stocks, Barrick Gold (NYSE:GOLD) is a mining company that produces gold and copper. Per its public profile, Barrick owns 16 operating sites in 13 countries. Fundamentally, Barrick’s core commodities should find relevance as many advanced industries require both metals for their physical properties.
Now, GOLD stock is risky because of its poor performance to start 2024. However, in the business week ending last Friday, shares gained just under 3%. It’s possible that it could be on a comeback. If so, GOLD’s forward dividend yield of 2.68% is attractive. While a bit below the material sector’s average yield of 2.82%, Barrick is showing recent signs of market stabilization.
Just as well, analysts have high hopes for the mining enterprise. They anticipate that 2024 sales will land at $12.24 billion, up 7.4% against last year’s sales of $11.4 billion. Also, 2025 sales may hit $13.32 billion or nearly 9% up from 2024’s projected revenue.
Further, analysts rate GOLD stock a consensus strong buy with a $20.31 price target.
Opera (OPRA)
A multinational technology firm, Opera (NASDAQ:OPRA) offers a range of products and services. These include PC and mobile web browsers, along with news content and an advertisement platform. While OPRA was off to a slow start this year, it recently skyrocketed. In the week ending last Friday, OPRA closed at $14.10, resulting in a return of 30%.
Catapulting sentiment was an analyst upgrade of OPRA stock, which led to strong trading volume. As well, part of the positive sentiment could center on the realization of potentially robust growth. For 2024, analysts anticipate Opera’s revenue to reach $455.34 million, up 14.7% from last year’s sales. Looking out to 2025, this metric could spike to $516.8 million or 13.5% up from 2024’s projected top-line figure.
Adding to the enthusiasm, the dividend yield for OPRA clocks in at 6.93%. In contrast, TipRanks shows that the underlying communication services space averages only 2.54%.
Then you have the analyst rating of a unanimous strong buy. They anticipate shares to hit $18.88 over the next 12 months, indicating significant upside potential. Thus, it could be one of the cheapest dividend stocks to watch.
Crescent Point Energy (CPG)
An oil and gas company based in Calgary, Alberta, Canada, Crescent Point Energy (NYSE:CPG) focuses primarily on light oil production in southern Saskatchewan and central Alberta. Yes, it’s a hydrocarbon specialist and therefore it clashes with the green and sustainable energy solutions narrative. As stated earlier, though, this narrative is running headfirst into an economic dilemma. Basically, a lot of folks can’t afford EVs.
If that’s the case, Crescent Point makes a cynically compelling case for cheap dividend stocks. With the infrastructure already present for combustion-powered cars, demand for hydrocarbons could actually rise. And that’s exactly what analysts see in 2024, for sales to reach $2.73 billion on average. If so, we’re talking about a 16.2% rise from last year’s result.
What’s even more enticing is the passive income. Right now, Crescent offers a forward yield of 4.52%. Even better, the payout ratio sits at under 26%. That means yield sustainability shouldn’t be a problem for investors.
If that wasn’t convincing enough, experts rate CPG a unanimous strong buy with a $9.83 average price target.
TransAlta (TAC)
An electricity power generator, TransAlta (NYSE:TAC) also specializes in wholesale marketing. According to its corporate profile, TransAlta operates 76 power plants in Canada, the U.S., and Australia. Further, it operates wind, hydroelectric, natural gas, and coal power generation facilities. For full disclosure, TAC stock is off to a rough start this year. And last week wasn’t pretty, with shares down more than 4%.
So, the reality is that you’re going to have to accept huge risks here. However, there is some evidence that since early February, TAC stock has (relatively) stabilized. Nevertheless, analysts are skeptical about TransAlta. For 2024, they project that revenue will slip to $1.99 billion, down almost 20% from last year. And 2025 sales may be even worse, down to $1.81 billion.
Further, for that risk, you’re only getting a forward yield of 2.6%. For the underlying utility sector, the average yield is 3.75%. So, why bother considering TAC as one of the cheap dividend stocks?
It comes down to capital gains potential. Analysts also peg shares a unanimous strong buy with a $11.12 price target. From Friday’s close, that comes out to almost 63% upside.
B2Gold (BTG)
Another precious metals-related enterprise, B2Gold (NYSEAMERICAN:BTG) is a Canadian mining company. Per its corporate profile, it owns and operates gold mines in Mali, Namibia, and the Philippines. Fundamentally, the company could rise on inflation continuing to be stickier than expected. Also, policymakers can’t afford for the economy to slip into recession. Therefore, borrowing costs may come down, which may be net positive for BTG stock.
While this storyline seems enticing, the problem is the market performance. Simply, B2Gold is off to a disappointing start this year. However, in the business week ending Friday, BTG stock gained over 3%, possibly suggesting a bottom.
Still, it’s going to take some convincing of covering experts, who believe that 2024 sales will land at $1.75 billion. That comes out to a decline of 9.5% against last year’s tally. However, they also believe that revenue could recover in 2025, generating $2.41 billion.
For accepting the risk, B2Gold offers a forward yield of 6.25%. Also, the payout ratio is very reasonable at only 40.92%.
Finally, analysts rate shares a consensus strong buy with a $4.16 price target. Regarding cheap dividend stocks, BTG has a bit of everything.
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.
