Dividend Stocks Under $5

Investors bruised by the stock-market downturn have turned to dividend-paying shares for safety and stability. That usually means the Dow Jones Industrial Average is the beneficiary. Dividend stocks are attractive during times of uncertainty because of the consistent cash payout, and the fundamental belief that companies with large dividends are more prudent. While share prices can move erratically, as the market has during the violence and unrest in the Middle East, dividends typically hold steady. Since Feb. 18, the S&P 500 has dropped 3% and is now below its 50-day moving average, which is a negative technical indicator. The environmental disaster in Japan, the world's second-largest economy, may also cast a pall on global growth and investing.

Still, several under-$5 companies such as Chimera Investment (CIM) offer fast growth as well as outsized dividend yields to those willing to take on greater risk. But for several stocks trading under $5, the dividend yield -- and risk -- are much higher. For long-term investors, the recent pullback has afforded a lower entry point in several high-yielding dividend stocks that trade for less than $5, including Chimera, Universal Insurance Holdings (UVE) and Primedia (PRM).

Source: The Street

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