Two cheap stocks with decent starting yields and inflation-beating dividend growth. After the recent market rally, I’m putting some extra cash to work in two “good enough” businesses, companies that aren’t my top picks but still offer solid income potential.

Without further ado, here are the stocks:

ABM Industries Incorporated is a facilities services provider, a fancy way of saying it handles janitorial and building maintenance work.

The company employs janitors, technicians, and maintenance personnel to service office buildings, airports, stadiums, schools, hospitals, data centers, and factories across the United States.

It’s not an exciting business and operates on relatively low margins.

However, mopping floors, cleaning toilets, and taking out the trash are essential, recurring tasks. That stability has allowed ABM to raise its dividend for 58 consecutive years.

The best part?

These increases outpace inflation, with a 5-year compound annual dividend growth rate of 8.16%. ABM trades at a low valuation, with a price to earnings ratio of just 10.19, a starting yield of 2.87%, and a dividend payout ratio of 32.01%.

ABM offers a decent starting yield paired with strong dividend growth, and the current valuation is low enough that any re-rating could push shares higher.

This isn’t a fast-growing stock, but it trades cheaply enough that I’m happy to invest.

Albertsons Companies, Inc. is one of the largest food and drug retailers in the United States. The company operates over 2,200 grocery stores and pharmacies under recognizable brands, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, and Kings Food Markets.

Albertsons stock has taken a beating over the past 12 months, with shares down more than 23%.

That sell-off has pushed the stock down to a price to earnings ratio of 7.26 and a 4.07% starting dividend yield. At the same time, the company is repurchasing shares and recently raised its dividend by 13.3%.

With a payout ratio of just 27.40% and a recent streak of double-digit dividend increases, including a 25% hike in 2025, I’m happy to acquire more shares.

A 4% starting yield backed by inflation-beating dividend growth is always welcome. And if Albertsons were simply re-rated from a price to earnings ratio of 7.26 to a price to earnings ratio of 10, the share price would rise to around $23.

Both ABM and Albertsons appear cheap while offering strong dividend growth. ABM operates in a boring sector that Wall Street largely ignores, but it provides a timeless, essential service. Similarly, Albertsons is a well-established grocer that’s been around for almost 90 years and owns a portfolio of recognizable supermarket brands.

Neither company qualifies as “great,” but both are solid businesses that have become so cheap that any positive news could push shares higher.

In other words, investors are getting dependable income with a relatively high starting yield, supported by strong dividend growth, along with a potential catalyst for capital appreciation.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.