4 Cheap Dividend Stocks You Can Buy Right Now

Since rising inflation, geopolitical tensions, supply chain disruptions, the Federal Reserve’s decision to speed up tapering its bond purchases, and the fears over the omicron coronavirus variant are expected to keep the stock market volatile, it could be wise to bet on dividend stocks to ensure a steady income stream.

Thanks to the market correction last week, many stocks with impressive dividend-payout history and solid earnings growth potential are trading at reasonable valuations. Betting on these stocks could help generate decent price returns as well.

Dividend-paying stocks China Petroleum & Chemical Corp. (SNP), Dow Inc. (DOW), Ternium S.A. (TX), and KT Corporation (KT), which are currently trading at discounted valuations, could be ideal bets now.

China Petroleum & Chemical Corp. (SNP)

SNP is a China-based energy and chemical company that explores and distributes crude oil and natural gas and manages chemical operations. The company processes and refines crude oil and offers gasoline, diesel, jet fuel, kerosene, ethylene, synthetic fibers, synthetic rubber, synthetic resins, and chemical fertilizers through wholesale and retail sales networks.

SNP paid a $2.47 semiannual cash dividend on October 7, 2021. The stock pays a $4.49 per share dividend annually, translating into a 10.19% yield. Its dividend has grown at an 8.9% rate over the past four years.

On November 30, 2021, SNP announced that the Sinopec Xinjiang Kuqa Green Hydrogen Pilot Project, China's first 10,000-ton photovoltaic green hydrogen pilot project, with $470.77 million total investment, has officially started construction. Upon completion, the project will produce an annual green hydrogen output of 20,000 tons, making it the world's largest photovoltaic green hydrogen production project. This marks SNP’s pledge to support China's "dual-carbon" goals, promote the development of a green hydrogen industry chain and carry forward the transformation and upgrading of the energy industry in China.

For its fiscal third quarter, ended September 30, 2021, SNP’s operating income increased 42.8% year-over-year to RMB741.64 billion ($116.34 billion). The company had RMB203.96 million ($31.99 million) in cash and cash equivalents as of September 30, 2021.

Analysts expect the stock’s EPS to increase 132.6% year-over-year to $9.21 in the current year. The consensus revenue estimate of $426.61 billion for the current year represents a 43.6% rise from the prior-year period. It surpassed Street EPS estimates in three of the trailing four quarters.

Over the past year, the stock has lost 3.5% in price and closed yesterday’s trading session at $44.04. SNP’s 0.28x forward EV/Sales is 88.3% lower than the 2.37x industry average. In terms of forward Price/Sales, SNP is currently trading at 0.13x, 89.7% lower than the industry average of 1.25x.

SNP’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has an A grade for Value and Momentum and a B grade for Growth, Sentiment, and Stability. Click here to see the additional ratings for SNP’s Momentum.

Of the 83 stocks in the B-rated Energy - Oil & Gas industry, SNP is ranked #3.

Dow Inc. (DOW)

DOW offers a range of science-based products and solutions, various materials science solutions for consumer care, infrastructure, and packaging markets worldwide. The company operates through Packaging & Specialty Plastics; Industrial Intermediates & Infrastructure; and Performance Materials and Coatings segments. It also engages in property and casualty insurance and reinsurance business.

DOW is scheduled to pay a $0.70 quarterly cash dividend on December 10, 2021. The stock pays a $2.80 per share dividend annually, translating into a 5.31% yield. The company’s dividend has grown at a 4.47% rate over the past four years.

On November 15, 2021, DOW announced the introduction of solvent-free SYL-OFF SL 184 Coating, an energy-efficient alternative that minimizes misting at very high product label production. As release liner producers invest in high-speed label coating production lines to increase production rates, lower costs, and meet increased demand for reliable product labels, DOW’s SYL-OFF SL 184 Coating is expected to witness high demand in the upcoming months.

For its fiscal third quarter, ended September 30, 2021, DOW’s net sales increased 52.8% year-over-year to $14.84 billion. The company’s non-GAAP pre-tax income came in at $2.72 billion for the quarter, indicating a 381.8% over the prior-year period. DOW’s non-GAAP net income came in at $2.07 billion, representing a 451.3% rise from the prior-year period. Its non-GAAP EPS increased 450% year-over-year to $2.75. DOW had $2.91 billion in cash and equivalents as of September 30, 2021.

The consensus EPS estimate of $8.99 for the current year represents a 441.6% rise from the prior-year period. Analysts expect DOW’s revenue to improve 42.3% year-over-year to $54.83 billion for the current year. It surpassed the consensus EPS estimates in each of the trailing four quarters. Its EPS is expected to grow at a 56% rate per annum over the next five years.

The stock has lost 1.5% in price over the past year and ended yesterday’s trading session at $52.76. DOW’s 1x forward EV/Sales is 43.2% lower than the 1.76x industry average. In terms of forward Price/Sales, DOW is currently trading at 0.71x, 49.1% lower than the industry average of 1.40x.

It is no surprise that DOW has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has an A grade for Value and a B grade for Momentum and Quality. Click here to see the additional ratings for DOW’s Growth, Stability, and Sentiment.

DOW is ranked #26 of 90 stocks in the A-rated Chemicals industry.

Ternium S.A. (TX)

Based in Luxembourg, TX produces iron ore and finished and semi-finished steel products, which are sold directly to steel manufacturers, processors, or end-users primarily in America and Europe. The company offers its products to the construction, automotive, manufacturing, home appliances, packaging, energy, and transport industries.

TX paid a $0.80 quarterly cash dividend on November 15, 2021. The stock pays a $2.90 per share dividend annually, which translates to a 7.69% yield. The company’s dividend has grown at a 3.58% rate over the past four years.

On August 19, 2021, TX signed a memorandum of understanding with Vale S.A. (VALE) to pursue opportunities for developing steelmaking solutions focused on reducing CO2 emissions. TX and VALE intend to develop economic feasibility studies of potential investments in TX’s iron ore briquetting plant and other plants producing metallic products with low carbon footprint, using Tecnored, HYL, and other technologies for iron reduction. This marks a significant step toward TX’s commitment to reduce by 20% its CO2 emission intensity by 2030.

TX’s net sales for its fiscal third quarter ended September 30, 2021, increased 114.7% year-over-year to $4.59 billion. The company’s gross profit came in at $1.97 billion, indicating a 415.8% rise from the prior-year period. Its operating income came in at $1.74 billion, up 24691.4% from the year-ago period. TX’s net income came in at $1.37 billion for the quarter, compared to a loss of $21.1 million in the prior-year period. Its EPS came in at $6.12, versus a $0.25 loss per share in the prior-year period. As of September 30, 2021, the company had $947.60 million in cash and cash equivalents.

Analysts expect the stock’s EPS to grow 543.4% year-over-year to $19.43 in the current year. The consensus revenue estimate of $16.27 billion for the current year represents an 86.3% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters. Analysts expect the stock’s EPS to grow at a marginal rate per annum over the next five years.

Over the past year, the stock has gained 32.8% in price and closed yesterday’s trading session at $37.72. In terms of forwarding EV/Sales, TX’s 0.56x is 68.1% lower than the 1.76x industry average. In terms of forward Price/Sales, TX is currently trading at 0.46x, 67.4% lower than the industry average of 1.40x.

TX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. TX has an A grade for Value and a B grade for Growth, Momentum, and Quality. Click here to see the additional ratings for TX (Sentiment and Stability).

TX is ranked #6 of 34 stocks in the A-rated Steel industry.

KT Corporation (KT) 

Based in South Korea, KT operates as an integrated telecom and digital platform service provider worldwide. The company offers principal services that include mobile, Broadband, IPTV, B2B communications, and fixed-line telephony. KT operates media content production, finance, real estate development, and commerce through its subsidiaries.

The stock pays a $0.61 per share dividend annually, translating into a 4.81% yield. The company’s dividend has grown at a 4.08% rate over the past five years.

On September 9, 2021, KT signed a Stock Purchase Agreement (SPA) with Malaysia-based Kuok Group to acquire Singapore-based Epsilon Global Communications Pte, Ltd. for $145 million. By acquiring Epsilon, KT will continue to accelerate the transformation into DIGICO, a digital platform company, by combining global data business infrastructure and advanced services with AI services (GiGA Genie) and robots into the digital transformation (DX) business.

KT’s operating revenues for its fiscal third quarter ended September 30, 2021, increased 11.6% year-over-year to KRW6.22 trillion ($5.28 billion). The company’s operating income came in at KRW382.40 billion ($32 million), up 30% from the prior-year period. KT’s net income came in at KRW337.70 billion ($29 million), indicating a 46.9% year-over-year improvement. The company had KRW3.09 trillion ($2.62 billion) in cash and cash equivalents as of September 30, 2021.

Over the past year, the stock has gained 15.6% in price and ended yesterday’s trading session at $12.61. KT’s 0.71x forward EV/Sales is 71.2% lower than the 2.48x industry average. In terms of forward Price/Sales, KT is currently trading at 0.38x, 76.9% lower than the industry average of 1.66x.

KT’s POWR Ratings reflect its solid prospects. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

KT has an A grade for Value and Stability and a B grade for Growth and Sentiment. In addition to the POWR Ratings grades we have just highlighted, one can see KT’s Momentum and Quality here.

Of the 47 stocks in the B-rated Telecom - Foreign industry, KT is ranked #5.

SNP shares were trading at $46.05 per share on Thursday afternoon, up $2.01 (+4.56%). Year-to-date, SNP has gained 11.62%, versus a 23.83% rise in the benchmark S&P 500 index during the same period.

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.

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