Dividends can be an underrated source of income for investors. With so much volatility in the stock market right now, it can be comforting to invest in companies that'll reward you in dividends regardless of how their stock prices perform. Here are three great dividend stocks you can buy right now for less than $50.
NYSE: T
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1. AT&T
After trying to buy its way into the media and entertainment industry, it seems the best things AT&T (T +0.42%) has done to help its business are admitting defeat and returning to prioritizing its core telecom business. AT&T took on lots of debt to finance its ambitious plans, which haven't gone so well (its stock is down more than 35% in the past five years).
Luckily for investors, the $43 billion WarnerMedia spinoff deal helped AT&T pay down a large chunk of debt, though the company still has more than $113 billion in long-term debt on the balance sheet.
It seems the refocus one telecom is paying off for AT&T, however, with its Q3 wireless service revenue up 5.6% year over year -- its best growth in more than a decade. The company also managed to add 708,000 new postpaid phone customers over that period, while rival Verizon (VZ 0.49%) lost customers.
Data by YCharts.
Although AT&T cut its yearly dividend in half when it spun off WarnerMedia, it's still lucrative at $1.12 per share. Its trailing-12-month dividend yield -- the average yield over the past year -- is just above 7%, which is great news as we approach a year that could be defined by high stock market volatility.
NYSE: BAC
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2. Bank of America
More often than not, following Warren Buffett's lead is a good investment decision. Through his company, Berkshire Hathaway (BRK.A 0.16%) (BRK.B 0.10%), Buffett has long been a Bank of America (BAC +0.78%) investor, owning more than a billion shares and almost 13% of the company. Part of the reason: Its reliable dividend.
It was a rough 2022 for Bank of America's stock, but rising interest rates will work in its favor because it increases its revenue from outstanding debt. In its 2022 third quarter, Bank of America brought in $24.5 billion in revenue, and $13.8 billion was from interest income. Revenue is likely to grow as the Fed continues to raise rates in the near future. The bank estimates an extra $4.2 billion in income for every 100-basis-point (1%) rise in rates.
After its stock dropped more than 25% in 2022, Bank of America's dividend yield is over 48% more than it was at the beginning of 2022 and nearly double what it was five years ago. At current price levels, Bank of America looks like a value too good for long-term investors to pass up.
Data by YCharts.
3. Altria
When it comes to tobacco, Altria (MO 1.19%) reigns supreme. But its recent struggles have been well documented, and the company is trying to find its footing after the failed billion-dollar Juul experience, its lackluster entrance into cannabis, and the end of its marketing partnership with Philip Morris International (PM +1.04%).
NYSE: MO
Key Data Points
One of the best things for Altria, at least in the foreseeable future, is the $483 million capital loss it's expected to take on its stake in cannabis company Cronos Group (CRON +0.37%) by abandoning its warrant to purchase additional shares. Much like AT&T, Altria is looking to return focus to its core moneymaker (cigarettes) while distancing itself from segments that have been dragging down the balance sheet.
Altria's flagship cigarette brand, Marlboro, controls around 40% of the U.S. cigarette market, but the company is banking on its growth coming from the execution of its Moving Beyond Smoking campaign, which looks to transition adult smokers to smoke-free options (that it sells, of course). How well -- if at all -- the company can execute this remains to be seen, but investors will be rewarded in the meantime.
Doubts aside, Altria's dividend is undeniable, and it's largely what draws investors toward the company. Having increased its yearly dividend for 52 consecutive years, Altria is a Dividend King that has proven it can survive a wide range of broader economic conditions and still reward shareholders. With a dividend yield of more than 8%, Altria is a gem for dividend investors.
Data by YCharts.
