Top Dividend Stocks Under $5

( Wendy's/Arby's Group slide updated with earnings results from Thursday.)

NEW YORK ( TheStreet) -- Chimera Investment ( CIM) and Technitrol ( TNL) are two of several stocks trading for under $5 that offer attractive dividend yields.

It's well known that dividend-paying stocks are attractive because of the consistent cash payout. While share prices can move sharply, as evidenced in the so-called "flash crash" on May 6 when the Dow Jones Industrial Average dropped nearly 1,000 points intraday, dividends typically hold steady; they reward shareholders with more than just stability.

"A lot of people are attracted to strong dividend players because you can see nice growth," said Robert Pavlik, chief market strategist with Banyan Partners. "In some cases, it's certainly better than what you're going to be getting at a bank."

Some companies, like Dow members Verizon ( VZ), Pfizer ( PFE) and Kraft Foods ( KFT), offer steady returns through dividends.

But for some investors, the lowest-priced stock on the Dow ( Alcoa ( AA) at $12.50) isn't cheap enough. The good news is that there are several under $5 stocks that can offer both growth and dividend yields that investors are hunting for.

That said, Pavlik warns that investors need to perform their due diligence when picking under $5 stocks with attractive dividend yields.

"If you're in the position to look at them, you want to make sure the balance sheet is strong enough that the company is going to be able to continue to pay the dividend that is forecasted," he said. "I know a lot of retailer investors are looking at a $2 stock that pays a terrific dividend yield. In some instances, though, if it sounds too good to be true it just may be."

With so many stocks trading at $5 and below, TheStreet whittled down the list to include only U.S. companies with a dividend yield over 1%, a market cap of at least $10 million, and more than 10,000 shares traded daily. Continue on to view the top $5 dividend stocks, sorted by market cap.

>>Find Ex-Dividend Dates With Our Dividend Calendar

Chimera Investment ( CIM)

Closing price: $4.09 (May 12)

Market Cap: $3.08 billion

Annual Dividend: 68 cents

Dividend Yield: 17% (forward annual)

Recent developments: On May 6, Chimera Investment reported a first-quarter profit of 19 cents a share, topping the Thomson Reuters average estimate for a profit of 14 cents a share. In early April, Chimera announced a public offering of 85 million shares of common stock for roughly $307 million in proceeds.

Wendy's/Arby's Group ( WEN)

Closing price: $5.09 (May 12)

Market Cap: $2.25 billion

Annual Dividend: 6 cents

Dividend Yield: 1.2% (forward annual)

Recent developments: On Thursday, Wendy's/Arby's Group said it lost $3.4 million, or a penny a share, in the first quarter. Excluding charges, Wendy's actually earned 2 cents a share, a penny higher than estimates. Sales fell 3% from a year ago to $837.4 million, above expectations.

Synovus Financial ( SNV)

Closing price: $3.24 (May 12)

Market Cap: $1.5 billion

Annual Dividend: 4 cents

Dividend Yield: 1.3% (forward annual)

Recent developments: In late April, Synovus priced an offering of 255 million common shares at $2.75 per share, which will reap net proceeds of approximately $668.4 million. Synovus also priced 12 million tangible equity units at $25 each, generating net proceeds of approximately $290.1 million. Citigroup and FBR Capital analysts upgraded the stock following the capital raise.

Mueller Water Products ( MWA)

Closing price: $5.05 (May 12)

Market Cap: $755.3 million

Annual Dividend: 7 cents

Dividend Yield: 1.4% (forward annual)

Recent developments: On May 5, Mueller Water posted a second-quarter loss of 11 cents a share, which was wider than the Thomson Reuters average estimate for a loss of 10 cents a share. Revenue in the quarter was down 6.3% from a year earlier to $301.8 million, although that was above the consensus target of $291.1 million.

First Busey ( BUSE)

Closing price: $5.27 (May 12)

Market Cap: $335.8 million

Annual Dividend: 16 cents

Dividend Yield: 3.2% (forward annual)

Recent developments: On April 20, First Busey reported first-quarter income of $2.9 million, or 4 cents a share, including TARP dividends, which was down from year-ago income of $5.5 million, or 15 cents a share. The company said earnings were "not at an acceptable level. Credit costs continued to weigh heavily on earnings as we recorded $14.7 million in provision for loan losses in the first quarter of 2010."

Advance America Cash Advance Centers ( AEA)

Closing price: $4.84 (May 12)

Market Cap: $284.8 million

Annual Dividend: 25 cents

Dividend Yield: 5.5% (forward annual)

Recent developments: On April 28, Advance America Cash Advance Centers reported a first-quarter profit of 22 cents a share, which was a penny below the Thomson Reuters average estimate. Revenue was down 7.7% from a year ago to $144.4 million, which was also below consensus.

Universal Insurance Holdings ( UVE)

Closing price: $5.04 (May 12)

Market Cap: $192.6 million

Annual Dividend: 48 cents

Dividend Yield: 9.8% (forward annual)

Recent developments: On May 10, Universal Insurance said it had first-quarter net income of $8.3 million, or 21 cents a share, down from a year-ago profit of $12.4 million, or 31 cents a share. The company attributed the decline to continuing pressure on operating results because of state-mandated wind mitigation credits and higher reinsurance costs.

Technitrol ( TNL)

Closing price: $4.54 (May 12)

Market Cap: $180.6 million

Annual Dividend: 10 cents

Dividend Yield: 2.3% (forward annual)

Recent developments: On May 3, Technitrol said it had a first-quarter adjusted loss of 24 cents a share, which surprised analysts who were expecting a profit of 3 cents a share, according to a poll by Thomson Reuters. Revenue of $92.9 million was down 7% from a year ago and was below the $96.2 million consensus. Technitrol did offer better-than-expected second-quarter revenue guidance of $102 million to $108 million, compared to the $101.3 million consensus.

Primedia ( PRM)

Closing price: $3.50 (May 12)

Market Cap: $156.1 million

Annual Dividend: 28 cents

Dividend Yield: 7.9% (forward annual)

Recent developments: On April 29, Primedia reported first-quarter earnings from continuing operations of 6 cents a share, compared with a year-ago loss of a penny a share. Total revenue fell to $59.3 million from $68.5 million in the year-ago period. Primedia said that given general economic and market conditions, it has limited visibility around 2010 revenue. It currently expects to see a 5.5% to 6.5% year-over-year decline in second quarter apartment revenue.

Marchex ( MCHX)

Closing price: $5.27 (May 12)

Market Cap: $119.8 million

Annual Dividend: 8 cents

Dividend Yield: 1.6% (forward annual)

Recent developments: On May 6, Marchex said it had adjusted first-quarter earnings of 4 cents a share, a penny above the Thomson Reuters average estimate. Revenue was down nearly 10% from a year ago to $24 million, although that was also better than expectations. Looking ahead, Marchex said it expects revenue of more than $19.5 million in the second quarter, compared to the Thomson Reuters average estimate of $22.8 million.

-- Reported by Robert Holmes in Boston.

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