Small-Cap Dividend Plays for 2013
Small-Cap Dividend Plays for 2013
There is something to be said about choosing the best dividend stocks without any regard to the industry or sector. There is much more that can be said about diversifying your portfolio and not weighting it to any one sector. It’s better to choose a portfolio that covers stocks across multiple sectors. Income investors look for dividend paying stocks with nice yield. They also worry about whether the yield can be sustained. It’s important to look at the history of dividend growth as well. In spite of the possibility for tax increases, dividends still form a vital part of investing, particularly if you deal with a 401K or an IRA. It is important to note that companies which pay raised dividends for long periods of time can also be found among the small-cap segment of publicly-traded stocks. Here are a few worth considering.
Self-service security systems company Diebold (NYSE: DBD) has a remarkable record of 59 uninterrupted years of dividend growth. The company is expected to make that number 60 with an impending dividend increase in February. It is currently trading at 11 times trailing earnings and generates a yield of more than 3.5 percent. Universal Corporation (NYSE: UVV) operates in the tobacco industry. The company has an astounding 42 years of ever increasing dividends to shareholders. It currently yields more than 3.5 percent. It trades at a trailing P/E ratio of less than 10. Park National Corp. (AMEX: PRK) is a small banking company in the Midwest. The company maintains a large dividend at a roughly 70% payout ratio. Aircastle (NYSE: AYR) is a company that leases roughly150 commercial and passenger airlines worldwide. The company has a low payout ratio of 30 percent which indicates that another dividend boost is a possibility in 2013. Currently the dividend yield is 5.9 percent.
Taken as a whole, small-cap companies often have greater growth potential than their large-cap counterparts. They have more room to run and grow. Each of these companies offers a low valuation and dividend yields ranging from 3 to over 6 percent. If you are a dividend investor these companies are worth further research.
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I like DBD on a pullback. Solid growth figures and can’t argue with the dividend growth.
I agree. I’m a dividend junkie. It’s one of the things that attracts me to a play.$$$
I like Park National Corp. The financial sector is going to well and Midwest banks are a solid investment.
Dividend plays will always be a popular. They give investors a cushioning even when the market goes south. Going by the recent years and the ever-dynamic state of the economy, I rather have a dividend stock.
High yield bonds and dividend paying stocks have been the investment of choice since the real estate crash. With interest rates so low, im sure that will continue.
Strong dividend stocks–particularly those with a long, solid history–are more conservative stock plays. With fixed income investments so low thanks to the current interest rate environment, anything that can add to longer-term stock price appreciation is welcome. Corporate boards know that continuing (and growing) their dividend is an important part of maintaining the company’s standing in the marketplace. I’ve even seen a REIT borrow money in order to pay a quarterly dividend–not that I recommend the practice.
Since I have a long-term investment horizon, I usually look more for growth than for dividends. However, what you guys are saying makes sense. This seems like a better substitute than many of the bonds in my portfolio.