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Greek global shipping company Star Bulk Carriers Corp. (SBLK) leads for February 2024 among dividend-paying stocks under $25 with the highest forward dividend yield and positive total returns in the last year. The company’s shares returned 0.7%, while it enjoys a forward dividend yield of 33.8%.
Investors often pick dividend stocks as a comparably stable source of passive income during periods of market volatility or in a bear market setting. Below, we explore the top four dividend stocks for February 2024 under $25 as measured by forward dividend yield. Our screen includes companies listed on the New York Stock Exchange (NYSE) or the Nasdaq with positive 1-year total returns, and it excludes any companies with payout ratios either negative or over 100%. All data are as of Feb. 9, 2024.
Key Takeaways
- Dividend-paying companies make regular distributions of a portion of their profits to shareholders, offering a chance for investors to earn passive income on their holdings.
- A key metric for these stocks is dividend yield, a measure of the yearly dividend amount compared to the current price of the stock that is expressed as a percentage.
- Because a company’s share price is always shifting, the dividend yield also changes at a similar pace.
- The four stocks on the NYSE or Nasdaq with the highest forward dividend yield that also trade for $25 or less as of February 2024 include Star Bulk Carriers, Trinity Capital, Natural Health Trends, and Seven Hills Realty Trust.
- Forward Dividend Yield: 33.8%
- Sector/Industry: Transportation
- Price: $22.94
- Market Cap: $2.2 billion
- 1-Year Total Return: 0.7%
Star Bulk is a Greek transportation company that ships minerals, grain, fertilizer, and steel products. In December, the company announced that it would combine with Eagle Bulk Shipping Inc., in an all-stock merger that is expected to close in the first half of 2024.
Star Bulk’s most recent dividend of $0.22 per share was paid on Dec. 18.
- Forward Dividend Yield: 15.8%
- Sector/Industry: Finance
- Price: $13.97
- Market Cap: $609.5 million
- 1-Year Total Return: 4.3%
Trinity Capital is an internally managed business development company providing loans and other financial products and services to growth-stage companies that have institutional equity investors.
During 2023, Trinity originated about $831 million in total new commitments, including a combination of secured loans, equipment financings, and equity investments. The company’s most recent quarterly dividend of $0.50 per share was paid on Jan. 12. Trinity aims to distribute 90% to 100% of taxable quarterly income or potential annual income across four quarterly dividend payments each year.
- Forward Dividend Yield: 13.7%
- Sector/Industry: Consumer discretionary
- Price: $6.16
- Market Cap: $70.9 million
- 1-Year Total Return: 25.2%
Natural Health Trends is a direct-selling and e-commerce firm with operations in North and South America, Asia, and Europe. It sells personal care products under the NHT Global brand.
In the fourth quarter of 2023, Natural Health Trends reported narrowing operating losses year-over-year and a 13% decline in revenues for the same period. Still, the company noted a sequential increase in orders and also declared a dividend of $0.20 to be paid on March 4.
- Forward Dividend Yield: 12.1%
- Sector/Industry: Finance/REIT
- Price: $12.14
- Market Cap: $179.8 million
- 1-Year Total Return: 11.4%
Seven Hills Realty Trust is a real estate investment trust (REIT) originating and investing in mortgage loans secured by middle market and commercial real estate. The company declared a dividend of $0.35 per share on Jan. 11, with an expected distribution date of Feb. 15.
How We Selected the Best Dividend Stocks Under $25
We screened for dividend-paying stocks based on companies that are listed on the Nasdaq or the NYSE, trading at $25 per share or less, and had positive total returns for the trailing 12-month period. We then ranked those firms by the highest forward dividend yield, which is calculated by dividing the annual dividend per share by the current share price.
However, there are risks to chasing high-dividend stocks. If companies have a dividend yield of 100% or more or a negative dividend yield—meaning negative net income—the company may be borrowing in order to pay dividends, which is generally unsustainable and unfavorable for investors. We excluded any such companies from our ranking.
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As of the date this article was written, the author does not own any of the above stocks.