Let’s talk about cheap dividend stocks. They are the most likely candidates to return multiples of your investment. It’s pure Peter Lynch — buy underfollowed businesses that do things people don’t understand. Eventually, the market catches up. By then, you’ve already got your money invested in this value business and you reap big rewards. If it’s a cheap dividend stock, then I’m really paying attention, because it means the market is not only overlooking it, it also has limited downside.

This is the strategy I used to make a lot of money in pawnshop stocks over the years. People know what a pawnshop is, but not how it makes money or how to invest in it. I did, and have done very well. I’ve found two candidates that happen to be dividend stocks. Even better, these dividend stocks are all under $7 — that means you can invest on the cheap and downside is limited: Intersections (INTX) and Atlantic Power Corporation (AT).

Source: InvestorPlace

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