Two Cheap Dividend Stocks With Yields Over 6%

Typically, when markets are down, stocks that generate income through dividend payouts are more sought-after by investors. That was the case during the 2022 bear market, as a record amount of money flowed into dividend-producing exchange-traded funds (ETFs).

Dividend stocks cooled off in 2023 as the stock market roared back and investors piled into technology stocks and other growth names.

It is hard to predict what the markets will do this year, but the consensus among experts calls for more muted performance from stocks. That could make stocks that generate high yield dividends more in demand in 2024 than they were last year. Here are two low-priced stocks with high dividend yields that should deliver in 2024.

1. Sinclair, Inc. – 7.2% dividend yield

Sinclair (NASDAQ:SBGI) is a media company that owns 185 television stations in 86 markets, as well as several networks, including the Tennis Channel, Comet, Charge!, TBD and The Nest. In addition, it owns 21 regional sports networks through its Diamond Sports Group, which is in chapter 11 bankruptcy.

The company currently pays out one of the highest yields for stocks that aren’t real estate investment trusts (REITs) or business development companies (BDCs), which are mandated by federal statute to pay out a higher percentage of their earnings in dividends.

Sinclair pays out a quarterly dividend of 25 cents per share at a lofty 7.2% dividend yield, which is how much as a percentage of its stock price goes to its dividend. It is currently trading at about $13.45 per share, so if you invested $1,000 in Sinclair, you would be able to buy about 75 shares. At 25 cents per share, those 75 shares would net you about $1 in dividend income per share annually, or $75 per year. That money could be used to reinvest in the stock to boost the total return or kept as income.

Sinclair has struggled over the past few years, but analysts see the stock moving higher this year as it should benefit significantly from political advertising revenue across its TV stations in a presidential election year. It has a consensus price target of about $19 per share, which would be an increase of 40% over its current share price. Long term, Sinclair’s outlook is a little cloudier, as the company is dealing with debt, bankruptcy with its regional sports networks, and other issues. But over the next 12 months or so, earnings should improve, and the yield looks attractive for dividend investors. Beyond that, investors will want to monitor how it manages some of its long-term challenges.

2. New York Community Bancorp – 6.4% dividend yield

New York Community Bancorp (NYSE:NYCB) made a big splash last year when it acquired some of the assets of the failed Signature Bank from the Federal Deposit Insurance Corp. It acquired about $38 billion in assets and $13 billion in loans from Signature, along with all of its branches in New York City and on the West coast. The transformational deal will not only bolster its private client business; but it is expected to be 20% accretive to earnings per share and 15% accretive to book value per share.

This bodes well for the bank’s dividend, which currently pays out a dividend of 17 cents per share at a yield of about 6.4%. With a share price of roughly $10.50 per share, a $1,000 investment in New York Community Bancorp would buy you about 95 shares of the stock. For the full year, those 95 shares would generate about $65 in dividend income.

Analysts are bullish on New York Community Bancorp as it has a median price target of $13 per share, which would be about a 24% jump over its current price. But this stock has better long-term prospects than Sinclair, with the acquisition of Signature’s assets and a potentially more favorable environment for the bank with interest rates coming down, spurring more loan activity and interest income.

The other thing that makes this stock attractive is its dirt-cheap valuation. It is trading at just 2.7 times earnings and is trading below book value with a price-to-book ratio of 0.73. This bank is a good buy, for both its dividend and its long-term growth potential.

This post originally appeared at ValueWalk.com.

Category: Dividend Stocks To Buy?