3 Dirt Cheap Stocks to Buy With $1,000 Right Now

Key Points

• Target's stock has lost two-thirds of its value, but the Dividend King has worked through hard times before.

• General Mills is down 40% from its highs, but the branded food maker is used to shifting its portfolio to adjust along with consumer trends.

• PepsiCo's stock has dropped 25% even though the soda and snack giant is already starting to update its brand portfolio.

• 10 stocks we like better than Target ›

The S&P 500 index (SNPINDEX: ^GSPC) is hovering near all-time highs. And yet shares of retailer Target (NYSE: TGT) have lost 66% of their value. Food maker General Mills (NYSE: GIS) has seen a price decline of more than 40%. And iconic beverage and snack giant PepsiCo (NASDAQ: PEP) is off by 25%.

All three of these high yielders are reliable dividend payers, which means their relatively high yields should make them look dirt cheap for dividend lovers. Here's a quick look at each one.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

1. Target is out of step; it's been there before

Target is a large retailer. The retail sector is inherently driven by the vagaries of consumer buying habits. One day your brand is so hot that consumers say the name with a French twist to highlight its attractiveness. The next day, Walmart and its everyday-low-price mentality is eating your lunch. That's just how it goes in the retail sector, with Target's stock off by a huge 66%.

Given the steep drop in Target's shares, it is pretty clear the company isn't doing particularly well right now. For example, same-store sales fell 1.9% in the second quarter of 2025, with overall sales off by around 0.9%. And that not-so-great outcome was an improvement over the company's first-quarter performance. This isn't all bad, however, as improvement hints that a turnaround is possible.

The big story here is that Target is a Dividend King with more than five decades of annual dividend increases behind it. The company has worked through hard times before and gotten back on track. It seems highly likely that it will do the same this time around, as well. If you buy today you can collect a historically high 5.2% yield. A $1,000 investment will get you around 11 shares of the iconic retailer.

2. General Mills is in the middle of an overhaul year

General Mills isn't a Dividend King, but it has a long history of providing investors with a generally rising dividend. The yield today is a lofty 4.8%, thanks to a 40% drop in the stock price. That's very attractive for a consumer staples company that is a vital partner to retailers across the country, noting that the average yield in the consumer staples sector is just 2.5% or so.

The truth is that General Mills is not hitting on all cylinders right now. Fiscal first-quarter 2026 sales were off 7% and organic sales dropped 3%. The company is calling fiscal 2026 an investment year, which basically means it is taking steps to get the business back on the growth track. That will include things like innovation and advertising. That's actually a pretty normal thing to do and to have to do for a branded food maker.

Given the high yield and the long history of success behind General Mills as a business, dividend investors should probably give management the benefit of the doubt. Indeed, a business turnaround is far more likely than General Mills going out of business. Investing $1,000 in the stock today will get you around 19 shares.

3. PepsiCo isn't doing as well as Coca-Cola

PepsiCo is a global consumer staples giant, with huge operations in the beverage, snack, and packaged food space. In the second quarter of 2025 the company managed to grow organic sales by 2.1%. That's not a horrible number at all, but it is much less exciting than the 5% organic sales growth achieved by beverage rival Coca-Cola. And investors have reacted by punishing PepsiCo's stock, which is down around 25% from its recent high-water mark.

PepsiCo isn't sitting around hoping for the best. It is using the playbook that it has long used, and the one that has allowed it to become a Dividend King. Specifically, it is adding new, on-target brands to its portfolio so it keeps pace with changing consumer tastes. It is also working to streamline its business operations. And the involvement of an activist investor (Elliott Management) suggests that there's extra pressure on management to turn things around.

The big story, however, is similar to the other two above. PepsiCo has worked through hard times before and is likely to do so again. But the price decline has left it with an attractive 4% dividend yield. Long-term investors with $1,000 to spare can buy seven shares of this iconic stock.

Even good companies go through hard times

Target, General Mills, and PepsiCo are all well-run businesses with impressive histories and lofty dividend yields. Sure, each one is in the middle of a rough patch, but each one has also survived such rough patches before. If you have a contrarian bent, buying while others are selling could set you up for collecting a reliable and lofty income stream. There's also the potential for capital appreciation, when these companies finally get back on track.

Should you invest $1,000 in Target right now?

Before you buy stock in Target, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Target wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,593!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,089,215!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 188% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 22, 2025

Reuben Gregg Brewer has positions in General Mills and PepsiCo. The Motley Fool has positions in and recommends Target and Walmart. The Motley Fool has a disclosure policy.