I believe dividend stocks should have a place in any portfolio, and the earlier you start to invest, the better. However, with the cost of living, inflation, and the global economy, not everyone has the capital to invest in big names like Apple, Google, and other stocks that go for $100 a share. I also do not recommend buying penny stocks or microcaps. That is often akin to gambling unless you 100% know what you’re getting into. 

So, what else is there? Well, for $20 or less, there’s a selection of dividend stocks from good companies with decent yields. All you need to know now is how to find them—and I’ll show you exactly how. 

How I Came Up With The Following Stocks

I used Barchart’s Stock Screener tool along with the following filters: 

• Last Price: $20 or less. 
• 200-Day Average Volume: More than 1M traded shares. Liquidity is a typical issue with “cheap” stocks. To counter this issue, I’ve limited the search to companies with more than 1 million shares traded daily for the last 200 days. That way, you can be sure you can buy and sell these stocks whenever necessary. 
• Dividend Payout Ratio: 60% or less. The dividend payout ratio is the percentage of a company's earnings it pays to shareholders as dividends. 60% is what I’d consider the very ceiling of a healthy ratio. Any more than that, and I’ll start to question if the company can sustain high yields. 
• Current Analyst Rating and Number of Analysts: 4.5 to 5 (Strong Buy) and eight or more. This combination of filters allows me to look for strong buy-rated stocks well-covered by Wall Street. It gives me more confidence about the results and helps me avoid “perfect” 5-rated companies that only have one or two analysts covering them. 
• Annual Dividend Yield: Left blank. 

I ran the screen with these filters, and I got the following results: 

After arranging the results from the highest to lowest yields, I’ll take the top three companies and discuss them here. Typically, I’d diversify the selection and remove stocks that belong in the same industry, but for this one, I’d make an exception for numbers 2 and 3. After all, one is a 100% Canadian company, and the other is a pure-play Permian operator in the US. 

With that out of the way, let’s start with number one: 

Rithm Capital Corp (RITM)

Formerly known as Fortress Investment Group, Rithm Capital is a REIT that invests in mortgage servicing rights (MSR) to various opportunities, including residential and consumer loans, commercial real estate, and more. Through subsidiaries such as Newrez, Genesis, and Sculptor, Rithm continues to expand its investment portfolio to provide high yields for its shareholders sustainably. The company has paid more than $5.8 billion in dividends since its inception. 

Many analysts consider RITM stock an attractive “strong-buy” due to its combination of low trading prices, consistent dividends, and low payout ratio. Analysts peg the stock with a high target price of $14, suggesting as much as 17% upside over the next year.

Rithm pays $1 annually, translating to a massive 8.41% yield. So, get it while it's still trading below $20. 

Veren Inc (VRN)

Veren Inc., formerly known as Crescent Point Energy, is a Canadian oil and gas exploration and production company that produces light and medium oils, with operations in southern Saskatchewan (Shaunavon and Viewfield Bakken) and Alberta (Kaybob Duvernay and Alberta Montney). 

This strong-buy-rated stock has the lowest trading price out of the three on this list at $5. As you can see on its chart, it hasn’t had the best year, but analysts are confident that VRN will see some recovery this year, based on its 4.82-average strong buy rating, the highest on this list. The high target price is also $9.62, suggesting a 94% potential upside in the next 12 months.

The company pays 11.5 cents CAD per share quarterly, translating to roughly 32 cents USD annually, and a 6.4% yield. 

Permian Resources Corp (PR)

Permian Resources Corporation is a US oil and natural gas company specializing in exploring, developing, and producing energy resources in the Permian Basin, spanning western Texas and southeastern New Mexico. Formed in 2022 through the merger of Centennial Resource Development and Colgate Energy Partners, it has become one of the biggest pure-play Permian basin operators with more than 450,000 net acres. 

Permian Resources pays 60 cents per share annually, reflecting a decent 4.28% yield. It also maintains the second-highest average score on this list at 4.71. Analysts also set a high target price of $23, translating to a potential 64% lift within the next 12 months, PR stock a top contender before it smashes through the $20 level. 

Final Thoughts

Investing is a never-ending journey, and the strategy you chose today will likely change tomorrow. Further, you don’t need millions of dollars to start. These three sub-$20 dividend stocks offer you the chance to buy good companies with excellent yields at low prices, so do your due diligence, and then, don’t miss out!