2 Inexpensive Dividend Stocks You Can Buy Right Now

Just because a share’s price has gone down doesn’t mean that name is worth owning. But one Well the stock which has lost part of its value is indeed a more attractive purchase because of its decline in price.

With that as a backdrop, a few blue-chip dividend-paying stocks have been performing relatively poorly lately, opening the door to opportunities for any income-conscious investor willing to step up.

1. Verizon

Verizon Communications (NYSE: VZ) is the largest wireless service provider in the United States, also offering broadband, cable TV and landline services. These are ideal trades because they tend to generate the free cash flow needed to support the payment of dividends.

Image source: Getty Images.

Think about it. When was the last time you didn’t pay your monthly bill to keep your internet connection on or to keep your mobile phone connected? Consumers can skip a shopping trip or postpone a vacation. Overall, however, they pay their telecom bills, with the vast majority remaining loyal to their current service provider month after month. This recurring revenue stream ultimately results in recurring dividend payments, and Verizon has not failed to make any payments in any quarter since 1984, when it was called Bell Atlantic. Add to that the fact that the company has increased its annual payout every year since 2007. The company continues to make progress towards achieving Dividend Aristocrat status (S&P 500 companies that have increased their dividend each year for at least 25 consecutive years). For this reason, it’s a reasonably good bet that the telecom giant will continue to do the same for as long as possible.

This ever-increasing dividend and the underlying resilience of the company’s cash flow doesn’t exactly impress investors in today’s economic environment. Although stocks rebounded from the massive sell-offs suffered early last year with the rest of the market, Verizon’s share price peaked in December, failing to hit new highs by then and losing more than 10%. of this maximum value in the interval. In fact, the stock is currently trading at the end of 2018.

Don’t be put off by the performance, however. The stock’s relative weakness translates into a good dividend yield of almost 4.7%, which you won’t find with too many other blue chips right now.

2. Franklin Resources

The other cheap dividend-paying stock that you might want to get into as early as possible is Franklin Resources (NYSE: BEN). The name might not ring a bell, but you might know the company better than you think. Franklin Resources is the name behind the Franklin Templeton funds, with over $ 1.5 trillion in assets currently under its management.

Like Verizon, the fund management business model is well suited for generating dividends. Fund companies carve out a tiny fraction of their total asset base in management fees each quarter, regardless of how well these funds perform. Obviously, fund managers don’t want to underperform other funds because investors can and should switch to better performing funds. Barring disastrous results, asset managers have a pretty good idea of ​​what kind of income is going on.

Unlike Verizon, however, the management fees of mutual funds are subject to fluctuations in the stock market. A 10% sale of the broad market, for example, results in a 10% reduction in the size of the asset base which determines the amount of fee-based income funds that income fund companies are in. able to perceive. Operating costs like marketing expenses can also vary significantly from quarter to quarter in the fund management business. For this reason, income investors with a fixed budget should not necessarily expect consistent quarter-to-quarter income with their investments in asset managers.

However, when you talk about a mutual fund the size and caliber of Franklin Resources, you can rely somewhat on constant payments. Indeed, not only has the company paid a dividend quarterly for decades, but it has increased its annual payout every year since 1981. It is unlikely to relinquish its status as a dividend aristocrat now.

The stock hasn’t been performing particularly well lately, slipping almost 20% from the June high to the July low. Although stock prices have partially recovered in the meantime, they are still more than 10% below the June high. Priced around nine times next year’s projected earnings per share – and with a healthy 3.5% dividend yield – the potential reward far outweighs the current risk here.