Cheap dividend stocks can make a great investment.  They have huge upside potential because they are priced low and they pay out a annually recurring yield which means investors take home cash even if their stock does not go up.  A trader can keep the dividend and report it as income or reinvest it back into the stock and increase the number of shares they own.   Let’s take a look at a few stocks that are currently trading under $5 per share but are yielding over 5% annually.

There are a lot of financial stocks that could have made my list but I sorted out the ones that looked fishy. I’m going to highlight a few of the non finance related stocks for this post. All the stock prices, financial data and yields on this page are as of 4/17/10 and of course will change once trading opens Monday.

Himax Technologies
Himax makes semiconductors for flat screen displays. HIMX is trading at 3.22 per share with an annual dividend of .28 giving it a yield of 8.7%. They have a positive EPS at .21 and a PE ratio around 15. On the one year chart, Himax is higher but it’s had an up and down year. Its trending higher since the first of March.

Torch Energy Trust
Torch is just what the name says it is, an energy trust. Torch is currently trading at 4.61 but the one year chart shows that TRU spent most of its time since August of 09 higher than $5 per share. Its kinda been trending downward since then. The annual dividend is .41 giving it a yield of 8.4%. EPS is positive and the PE ratio is 12.53.

PRIMEDIA
I’m not sure why PRIMEDIA’s name is in all caps but that’s the way it appears everywhere I look. PRIMEDIA makes and prints apartment guides. Their one year stock chart is kinda all over the place and at the same time has been trending higher in the last six months. PRM is trading at 3.55 with a yield of 8%.