I’ve always been enthusiastic about the power of dividend stocks to generate wealth over time. You might be surprised to learn that some of the most promising opportunities come with price tags under $10 per share. However, spotting the quality dividend stocks that trade under $10 without a guide is like searching for a needle in a haystack. Fortunately, I’ve found a way to extract insights about companies with strong buy ratings and significant growth potential.
To come up with a list of dividend stocks that aren’t only high-yielding and affordable but also have a positive consensus, I screened for the following criteria:
Dividend yield: 10% and above,
Last trading price: $10 and below,
Analyst rating: Strong buy.
Then, I arranged the results based on dividend yields from highest to lowest. Without further ado, let’s start with the highest-yielding contender.
In investment management, Oxford Lane Capital Corp. (NASDAQ:OXLC) distinguishes itself as a closed-end fund specializing in collateralized loan obligations. The company primarily invests in equity and junior debt tranches of CLOs, mostly with senior secured loans to firms carrying unrated or below-investment-grade debt.
Oxford Lane Capital reported outstanding financial results in Q1 2024 compared to the same quarter of last year. CLO equity adjustments jumped from $33 million to $51.28 million, showing how much the company’s investments in this specialized asset class are growing.
On the other hand, its net investment income rose significantly from $42 million to $56 million. With that and other impressive performance, the fund’s core net investment income (NII) for the quarter reached a staggering $107.2 million.
In terms of income, Oxford Lane Capital pays an annual dividend of $1.08, which translates to a forward dividend yield of 19.98%. This is quite a reward for shareholders. What tips the balance further is that analysts rate OXLC stock a “Strong Buy,” making it one of the most attractive dividend stocks under $10.
OFS Credit Company (OCCI)
Group of colleagues discuss something in an office conference room. commercial real estate
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The next dividend stock is similar to Oxford Lane but not identical. OFS Credit Company (NASDAQ:OCCI) is a prominent closed-end management investment company focusing on generating current income and capital appreciation through strategic investments in structured credit instruments.
The company’s portfolio includes collateralized loan obligation debt, subordinated securities, leveraged loans, high-yield bonds and other opportunistic credit investments.
OFS Credit’s financials for Q2 2024 report an impressive YOY growth trajectory. Its interest income increased to $8.07 million from $6.9 million recorded in the previous year. The company’s CLO equity adjustments also rose to $3.9 million from $2.4 million, further bolstering OCCI’s financial position.
In addition, its NII increased climbing to $4.5 million from $3.6 million; this translates to an NII per share of 28 cents. Moreover, OCCI offers a forward annual dividend of $1.38, translating to a 17.34% yield.
Finally, OCCI’s strong performance isn’t going unnoticed by Wall Street analysts, who also rate the company a “Strong Buy,” reflecting their confidence in its prospects.
Nordic American Tanker Shipping Ltd (NAT)
On board on a suezmax tanker, NAT operates tankers like this one
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The last company on the list, but certainly not least, is Nordic American Tanker Shipping (NYSE:NAT). This company specializes in tankers designed to be interchangeable and efficient in transporting crude oil. It maintains a fleet of impressive vessels, each bearing a name that reflects the company’s Nordic heritage, such as the MT Nordic Cygnus.
In Q1 2024, NAT’s spot vessels averaged a time charter equivalent (TCE) of $34,320 per day, while the total fleet, including term contracts, averaged $33,570 per day. Daily operating costs per ship hover around $9,000, highlighting the company’s operational efficiency.
However, the same quarter brought some choppy waters for Nordic American Tankers, as evidenced in its Q1 2024 financial reports. Net voyage revenue decreased to $60.5 million from $87 million the previous year, while net income fell to $15 million from $46.9 million putting the quarterly EPS at 7 cents.
Nordic American Tankers offers a forward dividend yield of 13.83%, based on a forward annual dividend of 48 cents per share. Market analysts have noticed the company’s potential and have rated it a “Strong Buy,” making it one of the best dividend stocks under $10.
On the date of publication, Rick Orford 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.