Investors looking for cheap stocks to buy should go for dividend stocks, a winning choice especially during volatile market times. Some not famous companies pay big dividends consistently: PNC Financial and Cincinnati Financial are among them.
Having good dividend shares in your investment portfolio is important for maintaining consistent distributions throughout the year, but especially when the markets are in high volatility. The importance of dividend stocks should be emphasized, because in this way, even if the share price is falling on some of the investments, the dividend payment can be used to reinvest in stocks, provide income to pay bills, save money.
Not all companies listed on the stock exchange pay dividends, but usually the larger and more established ones do. And not all of them pay large or substantial dividends, as economic or market conditions can affect their ability to do so. But you can find little-known companies that pay substantial dividends on a regular basis – here are two stocks to consider.
Cheap dividend stocks to buy: PNC Financial
PNC Financial (NYSE: PNC) is a major regional bank, the seventh largest in the United States, with $ 458 billion in assets. Like most financial institutions, PNC Financial has been hurt by the Covid crisis and the recession, but maintains a solid capital position, supported by the sale of its 22.4% stake in BlackRock in the second quarter, recovering $ 14 billion in additional cash. The bank also took steps to control expenses, reducing them by 4% in the second quarter compared to the same period in 2019.
PNC Financial, despite the recession, has plenty of liquidity to maintain its high dividend payout. Speaking of which, in the third quarter PNC Financial approved a dividend of $ 1.15 per share, among the highest in the industry. The bank has increased its dividend for nine consecutive years through 2020 and over the past five years by 125%. PNC Financial has a dividend yield of around 4% and a low payout ratio of just 6.79%, meaning it has plenty of liquidity available to help keep its payout.
Cheap shares with high dividends: Cincinnati Financial, a Dividend Aristocrat
Cincinnati Financial (NASDAQ: CINF) is a property and casualty insurance company and guarantees a very good dividend, but it is almost unknown among investors. Founded in 1950, it has increased its dividend annually for the past 37 consecutive years.
This qualifies Cincinnati Financial as a Dividend Aristocrat, a designation that refers to stocks that have had more than 25 consecutive years of dividend increases.
The company recently approved a quarterly dividend of $ 0.60 for the third quarter, equal to $ 2.40 per year per share. The Cincinnati Financial shares has a dividend yield of 3%, a payout ratio of approximately 23% and over the past five years the dividend has increased by 30%.