5 Dividend Stocks Under $5 to Buy Now

Slightly cooled-off inflation, strong job growth, falling gas prices, and improving consumer sentiment have boosted investor sentiment lately. However, the better-than-expected data gives the Fed more reasons to maintain its hawkish stance as price levels are high enough to disrupt the economy’s smooth running. Therefore, the potential consequences of aggressive interest rate hikes are expected to keep the market volatility in the near term.

Since this bleak near-term economic outlook makes it difficult to predict the movements of stocks, relying on dividends could be a wise decision. And to minimize the chances of high capital loss, one could invest in dividend-paying stocks trading at affordable prices.

Currently trading below $5, dividend-paying stocks TransGlobe Energy Corporation (TGA), ARC Document Solutions, Inc. (ARC), Educational Development Corporation (EDUC), Martin Midstream Partners L.P. (MMLP), and Acerinox, S.A. (ANIOY) appear wise additions to one’s portfolio now.

TransGlobe Energy Corporation (TGA)

Headquartered in Calgary, Canada, TGA acquires, explores, develops, and produces crude oil and natural gas in Egypt and Canada. It holds interests in various production sharing concessions (PSC) in Eastern Desert Egypt and Western Desert Egypt. It also owns approximately 100% working interest in Harmattan property.

The stock paid a $0.10 cash dividend on May 12, 2022. The company’s dividend payouts have grown at a 41.9% CAGR over the past three years.

In its 2022 second quarter, TGA’s production averaged 12.1 MBoepd, drilled and cased four Egypt Eastern Desert development wells, and sold approximately 451 Mbbl cargo of Egypt entitlement crude oil for proceeds of $46 million.

For its fiscal 2022 second quarter ended June 30, 2022, TGA’s revenue increased 47.5% year-over-year to $74.69 million. The company’s pre-tax income came in at $41.51 million, up 211.5% from the prior-year period.

Its net earnings came in at $32.13 million, representing a 316.1% rise from the prior-year period. TGA’s EPS increased 300% year-over-year to $0.44. It had $61.18 million in cash and equivalents as of June 30, 2022.

Analysts expect an EPS of $1.23 for fiscal 2022 ending December 31, 2022, indicating a rise of 348.8% from the prior-year period. The consensus revenue estimate of $339.50 million for the same fiscal year represents a 100.9% year-over-year improvement.

The stock’s 0.54x forward EV/Sales is 70.7% lower than the 1.83x industry average. In terms of forward Price/Sales, TGA is trading at 0.70x, 50% lower than the 1.40x industry average. Over the past year, the stock has gained 112.3% to close the last trading session at $3.29.

TGA’s POWR Ratings reflect this promising outlook. It has an overall B rating, which equates to 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 for Quality. Click here to see the additional ratings for TGA’s Growth, Stability, and Sentiment. TGA is ranked #10 of 42 stocks in the A-rated Foreign Oil & Gas industry.

ARC Document Solutions, Inc. (ARC)

ARC is a reprographics company that designs, builds, and operates printing and technology solutions for various industries. The company also resells printing, imaging, and related equipment primarily to architectural, engineering, and construction firms and provides ancillary services.

It serves IT and procurement departments, project architects, engineers, general contractors, facilities managers, retail, technology, educational, hospitality, and public utilities.

The stock pays a $0.20 per share dividend annually, translating into a 6.47% yield. Its four-year average dividend yield is 1.4%.

ARC’s net sales for its fiscal 2022 second quarter ended June 30, 2022, increased 8.4% year-over-year to $74.56 million. The company’s gross profit came in at $25.54 million, indicating a 12.1% rise from the year-ago period. Its income from operations came in at $5.56 billion, up 32.9% from the year-ago period.

ARC’s adjusted net income came in at $3.69 billion, representing a 39.8% year-over-year improvement. Its adjusted EPS increased 33.3% year-over-year to $0.08. As of June 30, 2022, the company had $44.60 million in cash and cash equivalents.

Analysts expect the company’s EPS to come in at $0.27 for its fiscal 2022 ending December 31, 2022, representing a 22.7% rise from the prior-year period. The consensus revenue estimate of $285.70 million for the same fiscal year represents a 5% year-over-year improvement. Its EPS is expected to grow at a rate of 10% per annum over the next five years.

The stock’s 0.68x trailing-12-month EV/Sales is 63% lower than the 1.84x industry average. In terms of forward Price/Sales, ARC is trading at 0.45x, 68.4% lower than the 1.41x industry average. Over the past year, the stock has gained 16.6% to close the last trading session at $3.09.

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

It has an A grade for Value, Quality, and Sentiment and a B for Stability. In addition to the POWR Ratings grades we have just highlighted, one can see ARC’s Growth and Momentum ratings here. ARC is ranked #2 of 41 stocks in the B-rated Outsourcing - Business Services industry.

Educational Development Corporation (EDUC)

EDUC operates as a trade co-publisher of educational children's books through its Publishing; and Usborne Books & More (UBAM) segments in the United States.

It markets its products to retail accounts through commissioned sales representatives, trade and specialty wholesalers, its internal telesales group, and a network of independent sales consultants through internet sales, direct sales, home shows, and book fairs.

The stock pays a $0.40 per share dividend annually, translating to an 11.94% yield.

EDUC had $1.42 million in cash and cash equivalents as of May 31, 2022. The stock’s 0.60x trailing-12-month EV/Sales is 52.3% lower than the 1.26x industry average. In terms of trailing-12-month Price/Sales, EDUC is trading at 0.22x, 78.1% lower than the 1x industry average. Over the past year, the stock has lost 65.3% to close the last trading session at $3.35.

EDUC’s POWR Ratings reflect this promising outlook. It 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 a B grade for Growth, Value, Sentiment, Quality, and Momentum. Click here to see the additional ratings for EDUC’s Stability. EDUC is ranked #1 of 11 stocks in the A-rated Entertainment - Publishing industry.

Martin Midstream Partners L.P. (MMLP)

MMLP provides specialty services to independent oil and gas companies, independent refiners, and chemical companies in the United States Gulf Coast region. It operates terminalling and storage; natural gas liquids; transportation; and sulfur services segments. It operates approximately 15 marine shore-based terminal facilities and 13 specialty terminal facilities located primarily in the Gulf Coast region.

The stock pays a $0.02 dividend annually, which translates into a 0.49% yield.

MMLP’s total revenues for its fiscal 2022 second quarter ended June 30, 2022, increased 44.9% year-over-year to $267 million. The company’s operating income came in at $21.49 million for the quarter, representing a 181.5% year-over-year improvement.

Its net income came in at $6.61 million, compared to a loss of $6.61 billion in the year-ago period. MMLP’s EPS came in at $0.17, versus a $0.17 loss per share in the prior-year period. As of June 30, 2022, the company had $43,000 in cash. Its EPS is expected to grow at a 3.6% rate per annum over the next five years.

The stock’s 0.65x trailing-12-month EV/Sales is 68.3% lower than the 2.05x industry average. In terms of forward Price/Sales, MMLP is trading at 0.15x, 90.1% lower than the 1.49x industry average. Over the past year, the stock has gained 36.1% to close the last trading session at $4.09.

MMLP’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

It has an A grade for Momentum and a B for Value and Quality. Click here to see the additional ratings for MMLP’s Stability, Sentiment, and Momentum. MMLP is ranked #2 of 34 stocks in the A-rated MLPs - Oil & Gas industry.

Acerinox, S.A. (ANIOY)

Based in Madrid, Spain, ANIOY manufactures and distributes flat, long, hot, and cold-rolled stainless-steel products worldwide. Its flat products include cold rolled coils, hot rolled and black coils, teardrop steel or coils, hot and cold rolled sheets, roughing materials, discs, billets, and plates.

Its long products include steel and color-coated wires, corrugated wires, hexagonal wire rods, bars, hot and cold rebars, decorticated bars, black bars, steel profiles, and corrugated hot rolls.

The company’s $0.26 annual dividend translates into a 5.2% yield.

For its fiscal 2022 half year ended June 30, 2022, ANIOY’s revenue increased 57.3% year-over-year to €4.82 billion ($4.90 billion). The company’s profit from operations came in at €847.30 million ($861.04 million), up 192.1% from the prior-year period.

Its net earnings came in at €627.18 million ($637.35 million), up 207.5% from the prior-year period. ANIOY’s EPS increased 209.3% year-over-year to €2.32. As of June 30, 2022, the company had cash and cash equivalents of €1.52 billion ($1.54 billion).

Analysts expect the company’s revenue to come in at $8.89 billion for its fiscal 2022 ending December 31, 2022, representing a 17.6% rise from the prior-year period. It surpassed Street revenue estimates in three of the trailing four quarters.

The stock’s 0.36x forward EV/Sales is 75.4% lower than the 1.47x industry average. In terms of forward Price/Sales, ANIOY is trading at 0.28x, 76.2% lower than the 1.19x industry average. The stock has gained 13.4% over the past month to close the last trading session at $4.83.

ANIOY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

It has an A grade for Value and a B for Stability, Quality, and Sentiment. Click here to see the additional ratings for ANIOY (Growth and Momentum). ANIOY is ranked #2 of 32 stocks in the A-rated Steel industry.

TGA shares were trading at $3.43 per share on Thursday afternoon, up $0.14 (+4.26%). Year-to-date, TGA has gained 16.57%, versus a -9.30% 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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