We recently published a list of the 13 High-Dividend Stocks to Invest In Under $10. In this article, we are going to take a look at where Barings BDC, Inc. (NYSE:BBDC) stands against other high-dividend stocks under $10.

Investors often favor dividend stocks for their long-term potential, with their appeal stemming from the consistent growth they tend to deliver over time. Ed Yardeni, the President of Yardeni Research, Inc., stated the following about dividends:

“Dividends are like plants: Both grow. But dividends can grow forever, while the size of plants is limited.”

Dividend stocks are experiencing renewed interest today as a means to return value to shareholders. In 2022, companies in the broader market paid out a record $565 billion in dividends—the highest amount ever recorded. This comes at a time when interest rates are structurally higher for the first time in decades, making the era of ultra-low borrowing costs seem like a thing of the past. Between 2018 and 2022, investors also weathered three bear markets, each marked by a drop of 20% or more.

As some of the biggest companies have grown to enormous sizes —both in terms of revenue and market cap—their ability to sustain high growth rates has naturally declined. Despite slower growth prospects, these companies remain highly profitable, generating more cash than they can effectively reinvest because they are returning it to shareholders through dividends. This is why more and more companies have initiated their dividend policies. In 2024, major tech companies joined the dividend club in an effort to offer both growth and value to shareholders. The tech giants, though offering low yields today, managed to return billions through dividends last year, which is a clear indication of their strong commitment to rewarding investors.

S&P Global also highlighted this trend in a recent report, noting that global dividend growth saw a sharp rise in 2024, climbing by an impressive 8.5%. The surge was especially strong in Asia-Pacific, where government policies encouraged companies to shift from annual to semiannual dividend distributions. At the same time, the US market experienced a wave of new and reinstated dividend payments, largely fueled by companies in the technology, media, and telecommunications (TMT) sectors.

With the market taking a volatile turn, dividend stocks are in the green, offering a sense of reassurance to investors. The Dividend Aristocrats Index, which tracks the performance of companies with 25 consecutive years of dividend growth, is down by over 4% since the start of 2025, compared with an over 10% decline in the broader market. As a result, analysts remain optimistic about dividend prospects in 2025. According to S&P Global, US total dividend payouts are expected to rise by 7% next year, reaching approximately $784 billion. In recent years—and continuing into the current fiscal year—sectors like energy, pharmaceuticals, financial services, banking, and REITs have played a major role in driving this growth. Given this positive outlook, we will take a look at some of the best dividend stocks under $10 with high yields.

A close up view of a bank of computers and wires, showing the complex technology powering the company's financial services.

Our Methodology

For this article, we screened for dividend stocks under $10, as of the close of April 7. From that list, we identified stocks with high dividend yields and picked 13 stocks with dividend yields over 4%, as recorded on April 8. The stocks are ranked according to their dividends. While high-yield dividend stocks are sometimes seen as signs of weakening financial health, we focused on selecting companies with solid dividend track records and strong balance sheets.

At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Barings BDC, Inc. (NYSE:BBDC)

Dividend Yield as of April 8: 13.18%

Share Price as of the Close of April 7: $8.15

Barings BDC, Inc. (NYSE:BBDC) ranks sixth on our list of the best dividend stocks with high yields. The North Carolina-based business development company specializes in debt investments in middle-market companies. The company has established itself as a prominent business development company by capitalizing on growth opportunities. Unlike high-risk stocks that may offer higher returns but with more uncertainty, BBDC provides a more stable investment alternative. Its consistent market performance, dependable dividend payouts, and growing net asset value make it a lower-risk option for investors.

In the fourth quarter of 2024, Barings BDC, Inc. (NYSE:BBDC) generated a total investment income of $70.6 million, a 6.9% decrease from the same period the previous year. It reported a net investment income of $29.5 million, or $0.28 per share, while its net assets increased by $24.8 million, or $0.24 per share. The company expanded its portfolio by making 15 new investments valued at $137.9 million and committed an additional $156.5 million to existing companies. In addition, it participated in a $3.5 million equity co-investment alongside affiliated entities in a portfolio company that provides financing to plaintiff law firms involved in mass tort and other civil litigation cases.

Barings BDC, Inc. (NYSE:BBDC) is confident in its portfolio and, with strong momentum continuing into early 2025, has declared a special dividend of $0.15 per share. This dividend will be paid in three equal quarterly installments starting in March. The company has consistently paid dividends to its shareholders since 2007. It currently offers a quarterly dividend of $0.26 per share and has a dividend yield of 13.18%, as of April 8.

Overall, BBDC ranks 6th on our list of the high dividend stocks to invest in under $10. While we acknowledge the potential of BBDC as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than BBDC but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.