Buying dividend stocks is a popular path to passive income. You don’t have to worry about maintaining a dividend stock as you would with real estate. Furthermore, some dividend stocks appreciate in the long run and keep up with the broader market.
However, some of the most established dividend stocks have high price points. For instance, Broadcom (NASDAQ:AVGO | AVGO Price Prediction) trades above $200 per share while Meta Platforms (NASDAQ:META) currently exceeds $600 per share.
Investors can get started with fractional shares, but where’s the fun in that? You can accumulate high-quality dividend stocks without spending a fortune on each share. These two dividend stocks have respectable yields, long-term potential, and trade below $30 per share.
Key Points About This Article
Why are we covering this?
We have covered dividend stocks for more than a decade, but prices for many of these stocks continue to rise. While fractional shares make it possible to own any stock, some investors prefer to own entire shares of publicly traded companies. That’s why we created this list of two dividend stocks that are $30 or less.
What to Consider Before Buying a Dividend Stock
A dividend yield lets you know how much you’ll earn if you put any amount of money into a stock. For instance, if you put $1,000 into a dividend stock that yields 2%, you will receive $20 per year. That doesn’t include reinvestments or a dividend hike later in the year.
However, there’s more to consider than a stock’s yield and price. Investors should look at a stock’s financial growth rates, fundamentals, valuation, and other details. It’s also important to assess how a dividend stock aligns with your long-term goals. Some investors gravitate toward dividend growth stocks to maximize their returns, while others want less risky high-yield stocks that provide the most passive income right now.
You shouldn’t buy a dividend stock just because it has a share price below $30. Fractional shares make any stock accessible. However, you can find quality dividend stocks that trade below $30/share. The lower price point makes it easier to accumulate 100 shares, an important milestone for investors who want to sell covered calls.
How to Find Dividend Stocks Under $30
The best way to find a list of dividend stocks that are under $30 is to use a stock screener. These screeners have many parameters that allow you to create a shortlist of stocks that fulfill your criteria. For instance, you can set a stock screener that only shows securities valued under $30/share that have dividend yields above 0.00%. You can also raise the minimum dividend yield in your stock screener to find securities that yield at least 2% while trading below $30/share.
The two dividend stocks covered in this list were found with a stock screener. Both of these stocks have yields above 1.5%. They also have rising revenue and high net profit margins.
Gen Digital
Gen Digital (NASDAQ:GEN) is a software company that trades below $30 per share and offers a 1.81% yield. The company has several cybersecurity companies under its corporate umbrella, such as Norton, Avast, and LifeLock. The company has more than 500 million users across its cybersecurity software companies.
Revenue increased by 3% year-over-year in Q2 FY25. Bookings also inched up by 4% year-over-year, demonstrating rising demand for the firm’s software. Gen Digital also raised its full-year revenue guidance. Net income increased by 9.5% year-over-year, resulting in a 16.5% net profit margin.
The stock is only up by 9% over the past five years, but it’s gained more than 20% year-to-date. Gen Digital’s recent acquisition of MoneyLion (NYSE:ML) should fuel more growth. MoneyLion is a fintech company that has been posting year-over-year revenue growth above 20%, and it recently became profitable as well. This addition suggests that Gen Digital’s year-to-date gains are a better indicator of where the stock will head than its 5-year gains.
Barclays
Barclays (NYSE:BCS) has been putting together a monstrous year, capped with a 65% year-to-date gain. The bank trades at a 9 P/E ratio and offers a 3.25% yield for investors. Shares trade below $15 apiece, making it a good stocking stuffer.
The financial services provider reported 5% year-over-year income growth and cited “more stable income streams” in the third quarter. The firm also reported a 29.4% net profit margin, which is higher than usual. Normally, the company reports net profit margins that are at 25% or a little higher, but net profit margins getting closer to 30% is a good development.
While the dividend yield is already high, Barclays also does plenty of stock buybacks that reward long-term investors. The company plans to spend at least £10bn on its buyback program between 2024 and 2026. Barclays pays out its dividend semi-annually.
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