Looking for top dividend stocks under €20? Dividend stocks are popular among income investors because they reward shareholders with large dividends. The best dividend stocks provide very reliable and at the same time high dividends. A few can be identified here.
Top dividend stocks with more than 6% returns
The shares that can currently be bought for less than 20 euros per share, for example, includes the shares in the American telecommunications company AT&T (WKN: A0HL9Z) or that of the Spanish competitor Telefonica (WKN: 850775).
Both shares have not exactly been characterized by a good price development. In any case, many telecommunications companies have been suffering for a long time with a chronic lack of growth – despite 5G. At the same time, high debt levels are a burden. In light of the currently rapidly rising interest rates, this may be one of the reasons why many telecommunications companies have lost value again significantly in recent weeks.
Telecom stocks also have something to offer
Nevertheless, there is much in favor of the telecom giants. For example, an oligopolistic market structure. The telcos are also likely to be very defensive due to their business model.
The current valuations should have already priced in a lot. AT&T stock currently trades at an expected price-to-earnings ratio of 6.5 with a yield of 6.6% (as of 09/09/22, Reuters). The Spanish competitor comes in at 11.7 with a yield of 8.5%. However, it seems premature to reassess the shares.
One of the best dividend stocks with a yield of more than 6% at a share price below 20 euros is also Italian insurance companies general (WKN: 850312). The shares in the Trieste-based company can currently be bought at an expected price/earnings ratio of 7.9. The dividend yield is an impressive 7.3% (as of 09/09/22, Reuters).
Like Allianz, the Italians are a diversified insurance group. Therefore, they also have a strong market position in the life insurance industry. Rising interest rates can therefore have a positive effect. The fantasy made the stock climb to over 21 euros at the beginning of the year. Then followed the crash to below 15 euros.
Last but not least, you can Children Morgan (WKN: A1H6GK) a listed US midstream company Top dividend stocks with more than 6% yield that can be bought for less than 20 euros. The Texans own a huge pipeline network and numerous tank farms in the US. Kinder Morgan is also heavily involved in the LNG export market.
With an expected price-to-earnings ratio of 15.2 and a dividend yield of 6.2% (as of 09/09/22, Reuters), the company’s shares may be anything but overpriced right now.
Right now, it’s easy to find a few top high-yielding dividend stocks that have a history of paying relatively reliable dividends.
Investors must simply not care if a share can be bought for less than 20 euros. The share price does not say anything at all about the valuation of the stock. Here, the price-earnings ratio can provide a first insight. The trivial valuation metric also has pitfalls.
A company’s growth potential is more important than the level of return, valuation or a low share price. Because only through growth will higher sales and profits be written in the future – and these should be the drivers for the share price in the longer term.
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Frank Seehawer owns shares in AT&T and Kinder Morgan. The Motley Fool does not own any of the stocks listed.