Boomers and Gen Z Are Buying 5 High-Yield Stocks Under $20 Hand-Over-Fist

"Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and have substantial total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid."

"We screened our 24/7 Wall St. high-yield dividend stock research database, looking for companies trading below the $20 level that offer investors enormous total return potential. While more suitable for growth and income investors with somewhat higher risk tolerance, all five of these stocks are solid ideas as we head into the holidays. All are rated Buy at top Wall Street firms."

"Ellington Financial Inc. ( NYSE: EFC) has been at the forefront of data-driven investing since its founding in 1994, and it pays a rich 11.3% dividend. This high-quality mortgage real estate investment trust (REIT) is a favorite among Wall Street investors. Ellington, through its subsidiary, Ellington Financial Operating Partnership, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States."

High-yield dividend stocks offer significant income and contribute meaningfully to total return, which combines dividends, interest, capital gains, and distributions. An example shows a $20 stock paying a 3% dividend that rises to $22 delivering a 13% total return: 10% price appreciation plus 3% dividends. Companies trading below $20 can present substantial total return potential but suit investors with somewhat higher risk tolerance. Dividends have historically accounted for roughly 32% of S&P 500 total returns since 1926, making sustainable dividend income and capital appreciation potential essential. Ellington Financial (EFC) is a mortgage REIT paying an 11.3% dividend.

Read at 24/7 Wall St.