Low priced stocks that pay dividends have a few advantages. The lower share price allows for greater diversification. The dividends provide the investor with quicker return or capital and can reduce volatility. You may not be aware of them, but there are actually more than half a dozen stocks, including closed end funds, that sell for less than $5 a share and pay a dividend with yields greater than 6%.
WallStreetNewsNetwork.com just updated its list of high yield stocks selling for $5 or less, with yields ranging from 0.4% to 16.5%. Just remember that the yields are based on historical payments, and the dividends can be adjusted, reduced, or terminated at any time. I also believe that extremely high yields may not be sustainable.
Electro-Sensors Inc. (ELSE), which makes and sells industrial production monitoring and process control systems, has a yield of 3.5% and recently traded at 4.64. The company, which trades at 28 times earnings, has been paying quarterly dividends since 1995. Earnings for the latest quarter ending September 30 were down 16.9%. The company reports earnings for the quarter ending December 31 on February 21.
Euroseas Ltd. (ESEA) owns and operates dry bulk ocean transportation carriers that transport iron ore, coal, and grain. The stock yields 6.6% and recently traded at 3.62 per share. Quarterly dividends have been paid since 2006. The stock has a forward price to earnings ratio of 21. Earnings for the latest reported quarter were negative, and the company reports again on February 28.
Disclosure: Author does not own any of the above.