3 High-Yield Stocks for Income Priced Under $10
These low-priced names all have yields above 5%.
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Stocks with high dividends mean more income for every dollar invested. All other things equal, the higher the dividend yield, the better.
Income investors often like to find low-priced dividend stocks, as they can buy more shares than they could with higher-priced securities.
The following three dividend stocks have yields above 5%, and share prices below $10.
An Iconic Name With a High Yield and Low Price
Ford Motor Co. F is one of the world’s largest automakers. It operates a large financing business as well as its core manufacturing division, which produces a popular assortment of cars, trucks, and SUVs.
Ford posted fourth-quarter and full-year earnings on February 5, and results were better than expected. Adjusted earnings per share came to 39 cents for the fourth quarter, which was seven cents ahead of estimates. Revenue was up almost 5% year over year for the quarter to $48.2 billion, which also beat estimates by $5.37 billion.
The fourth quarter was the highest revenue total the company has ever produced. Ford Blue increased 4.2% to $27.3 billion in revenue for the fourth quarter, beating estimates of $25.9 billion. Revenue for Model e, Ford's electric vehicle business, was down 13% year over year to $1.4 billion, $400 million less than expected. Ford Pro revenue was up 5.3% to $16.2 billion, beating estimates for $15.6 billion.
For 2025, Ford expects full-year adjusted EBIT of $7 billion to $8.5 billion, and for adjusted free cash flow of $3.5 billion to $4.5 billion, with capex of $8 billion to $9.5 billion. Full-year EBIT is expected to be $7.5 billion to $8 billion for Ford Pro, $3.5 billion to $4 billion for Ford Blue, and an EBIT loss of $5 billion to $5.5 billion for Ford Model e. Ford Credit is expected to add $2 billion.
Ford declared a supplemental dividend of 15 cents per share for March payout. Supplemental dividends are paid in addition to the regular quarterly dividend of $0.1875 per share.
The regular dividend provides a current yield of 8%.
Monthly Dividends Are on the Horizon
Horizon Technology Finance Corp. HRZN is a BDC (Business Development Company) seeking to provide venture capital to small and medium-sized companies, mainly in the life sciences, technology, healthcare-IT sectors, and sustainability, which account for around 41%, 32%, 16%, and 11% of its portfolio, respectively.
The company has been able to generate attractive risk-adjusted returns through directly originated senior secured loans and additional capital appreciation through warrants.
For the 2024 fourth quarter, Horizon’s net investment income of $10.4 million, or $0.27 per share, compared to $15.0 million, or $0.45 per share for the prior-year period. Total investment portfolio of $697.9 million as of December 31, 2024. Net asset value of $336.2 million, or $8.43 per share, as of December 31, 2024. Annualized portfolio yield on debt investments of 14.9% for the quarter.
Net investment income of $47.8 million, or $1.32 per share for 2024, compared to $61.4 million, or $1.98 per share, for the prior year. NII per share of $1.32 covered the regular dividend payout of $1.32 for the year. For the year, Horizon achieved annual portfolio yield on debt investments of 15.6% for 2024.
Horizon’s investment results have been quite stable over the years, despite many of its peers in the sector suffering due to the oversupply of cheap financing. Lower market rates caused BDCs to keep refinancing their loan assets at gradually lower rates up until recently, damaging their investment results.
However, Horizon’s niche operations that require more unusual expertise in industries like biotech have maintained their higher ROIs amid a lack of cheap loans for such risky sectors, including early-stage tech companies. As its successful due diligence record has made possible, the company has maintained quite stable dividends, paid out monthly.
BDC’s typically distribute a large percentage of annual NII, and Horizon is no different. With a 2024 payout ratio of 100%, there is little room to continue growing the dividend, unless HRZN generates future NII growth.
Horizon's shares currently yield 14%.
An Under-the-Radar Bank
Kearny Financial Corp. KRNY is a bank holding company. Headquartered in Fairfield, New Jersey, the bank operates 43 branches, primarily in New Jersey along with a couple of locations in New York City. Over the years, Kearny has evolved from being a traditional thrift institution into a full-service community bank.
The bank is currently focused on updating its technological systems, offering a greater diversity of loan products, and improving operational efficiency. Kearny had enjoyed tremendous growth over the past decade as it executed on this strategy to enlarge and diversify the bank.
For the company’s second-quarter fiscal 2025 (ending June), reported January 30, Kearny reported a profit of $0.11 per share. This was up sharply from a 22 cent per share loss in the same period of the prior year, though that number reflects various one-time non-recurring charges. We believe that the past two years were a uniquely poor operating environment for Kearny and that it will enjoy more normal profitability eventually.
That said, the outlook for inflation and interest rates looks increasingly unsettled. It may take longer for regional banks such as Kearny to return to more normalized levels of profitability than previously expected.
Kearny delivered a breathtaking growth trajectory between 2015 and 2022, growing earnings from 6 cents to 95 cents per share over that period. This fueled tremendous growth in the company’s dividend as well. However, Kearny was seemingly caught offside by the sharp rise in interest rates.
The firm’s large write-down in 2024 was bad optically, but the bigger underlying issue was that the bank’s net interest margin plunged from 2.9% in 2022 to just 2.0% in fiscal year 2024.
However, it is widely expected the Federal Reserve will lower the Fed Funds rate in 2025, which should provide almost immediate relief to Kearny as its cost of deposits drops in line with the Fed’s rate cuts. We think the dividend is sustainable at current levels, but the bank will be hard-pressed to offer much in the way of increases until earnings recover.
KRNY shares currently yield 6.7%.
At the time of publication, Ciura had no positions in any stocks mentioned.