Sometimes juicy dividends come in small packages.
When income investors hunt for yield, they have to look in unlikely places, like small-cap and microcap stocks. Sure, companies with smaller caps can be riskier and less liquid, but that doesn’t mean they won’t be good for their payouts.
And with ultra-low interest rates making a decent return hard to come by, starving income investors need to be flexible in their hunt for yield.
Another advantage of the little guys paying dividends is that they also have the potential for excellent price appreciation. It’s much easier to grow exponentially off a smaller base, for one thing. Additionally, it just so happens that small-cap value stocks are the best-performing asset class over long periods of time.
Dividend hunting in the small-cap and microcap universe turns up a number of names with outstandingly high yields and decent prospects, too. It does not, however, reveal anything like a list of household names — which is just as well. The best opportunities are often the least well-known.
Here, then, are five of the best hidden dividend stocks we found: