3 dirt cheap dividend stocks to buy under $5

These 3 cheap companies are all trading under $5 and pay whopping dividends

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

What's better than a quality company paying nice dividends?

A share price under $5 bucks for a quality company paying huge sustainable dividends, that's what.

With dividend yields of 11.8%, 8.5% and 6.8% respectively, the following 3 shares could be a nice fit for the income portion of your portfolio. The bonus is that with share prices under $5.00, investors can also buy a reasonable amount of shares too, and these 3 companies also trade at cheap valuations. What more could an investor want?

Without further ado, here they are…

Countplus Limited (ASX: CUP) – price 68 cents

The financial services company offers financial planning, wealth advice, broking and accounting services to its customers, and also holds 5.4% of the shares in Class Limited (ASX: CL1) which now makes up ~24% of the value of the company. Countplus currently pays a fully franked dividend yield of 11.8% (4 quarterly payments of 2 cents each) at the current price and expects to match last year's net profit and earnings per share in FY2016. That puts Countplus on a P/E ratio of around 7.3x.

Tamawood Limited (ASX: TWD) – price $2.93

We've mentioned home designer and builder Tamawood several times over the past few years as a quality share paying decent dividend yields (averaging 9.7% over the past decade) and this year is no exception. The company has committed to paying a 25 cent fully franked dividend this financial year (FY16) – which, at the current price of $2.93, is a whopping dividend yield of 8.5%, and a P/E ratio of around 11.7x. For a more in-depth discussion of the company's operations, this article should help.

Contango Microcap Limited (ASX: CTN) – price 93 cents

With a share price of 93 cents, listed investment company Contango Microcap is trading at a big discount to the net tangible assets per share, which at the end of April stood at $1.14 before tax. That's the equivalent of buying a dollar worth of assets for just 81 cents. The Contango portfolio also contains 71 small to medium cap securities, giving investors instant wide diversification at discounted prices. The cherry on top is the company's trailing 6.8% partly-franked dividend yield with 3.7 cents expected to be paid as a final dividend in September/October 2016.

Motley Fool writer/analyst Mike King owns shares in Contango Microcap. You can follow Mike on Twitter @TMFKinga The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »