High-Yield Dividend Paying Small-Caps

Published Thu, 20 Aug 2015 12:30 CET by DividendYields.org

According to research done by TheRoyceFunds, 54% of the S&P Small-Cap 600 Stock Index have an average dividend yield 2.3%, almost in line with 2.4% of the S&P 500. The S&P 500 includes companies with an average dividend yield below 2%, whereas 38.5% of the 600 Small-Cap companies have consistently paid dividends for five straight years (at least). Furthermore, it is estimated that the average annual total return for Small-Cap Russell 2000 Index is 9.5% from 1993 to 2014, whereas the average annual total return for small-cap dividend payers is 11.2% versus 8.1% for the non-dividend payers over the same period.
Below we summarize three high-yield dividend paying small-caps from different sectors.

CMC, DRAD and SCL Price Performance Year over Year Graph
Commercial Metals Company (NYSE: CMC) is trading in the Basic Material sector of the Steel & Iron industry and engages in the manufacturing, recycling and sale of steel and metal products and services across the U.S and globally. CMC’s Q2 2015 YoY earnings growth of 364% ($61.7m from $13.3m in 2014) indicates a strong company, taking into account that, traditionally, Q2 is a slow quarter due to limited construction activity globally. CMC has conducted equipment enhancement, thus capitalizing on the seasonal slowdown and depressed energy markets to be ready for the stronger market activity in Q3 and Q4. Additionally, CMC consistently delivers dividends, which is evident in its low payout ratio. This is in spite of its relatively high D/E ratio (107.93), which is the result of mergers and acquisitions. Analysts estimate an average 3 year EPS of $1.78 and a 5 year earnings growth of 12.6%. A beta of 1.27 suggests a relatively volatile investment.

Digirad Corporation (Nasdaq: DRAD) is trading is the Healthcare sector of the Medical Appliances & Equipment. DRAD is the leading provider of diagnostic services in the U.S with a focus on in-office nuclear cardiology and ultrasound imaging services. DRAD’s high payout ratio raises a red flag concerning the company’s volatile earnings, as DRAD has zero debt, and it is justified by its strategic partnership with Perma-Fix Medical S.A and business expansion in the Polish market. Additionally, DRAD’s Q2 2015 net income of $1.1 million was in line with Q2 2014 due to high seasonality in the sales of nuclear imaging cameras, which increases the volatility of earnings. Given DRAD’s focus on strategic acquisitions that can fit within its business model and bring further growth in a financially disciplined manner, analysts estimate an average 3 year EPS of $0.19 and a 5 year earnings growth of 3.8%. A beta of 0.68 indicates a perfectly safe investment.

Name Price ($) 52 wk low 52 wk high 52 wk low % 52 wk high % Market Cap ($ b) P/E Beta Payout Ratio
Commercial Metals 16.27 12.80 18.67 27.11% -12.85% 1.88 10.52 1.27 31%
Digirad 4.09 3.41 5.48 19.91% -25.38% 0.08 22.72 0.68 105%
Stepan 46.95 36.34 55.67 29.20% -15.66% 1.05 18.62 0.68 28%

Stepan Company (NYSE: SCL) is trading in the Consumer Goods sector of the Cleaning Products industry and engages in the production and sale of specialty and intermediate chemicals to manufacturers for use in various end products globally. SCL’s successful strategic decisions on its two largest segments of surfactants and polymers led to an average growth of 26% of total operating income. These two segments, which account for 97% of the company’s total operating income, performed particularly well in the global markets. Additionally, SCL’s remaining debt is at rates lower than 4%, which justifies its low payout ratio, but it also leaves room for effective strategy implementation, earnings growth and strong dividends. Analyst consensus estimate an average 3 year EPS of $3.55 and an earnings growth of 16.71%. A beta of 0.68 suggests a non-volatile investment.


Stock name Dividend Yield
Commercial Metals 2.75
Stepan 1.02
Digirad 0.00

Articles featuring Commercial Metals (CMC):

Stocks Trading Ex-Dividend on 1/12/2017

The following is a list of companies trading ex-dividend on Thursday, January 12th:Cantel Medical (NYSE: CMN) declared a semi-annual dividend of $0.07 per share, or $0.14 annualized. This is a 16.7% increase from the prior dividend of $0.06. The dividend will be payable on January 31, 2017, to stockholders of record on January 17, 2017, with an ex-dividend date of January 12, 2017. The annual yield on the dividend is 0.2 percent.Get daily under-the-radar research with... Read more

Stocks Trading Ex-Dividend on 11/7/2016

The following is a list of companies trading ex-dividend on Monday, November 7th:Artesian Resources (NASDAQ: ARTNA) declared an annual dividend of $0.2283 per share, or $0.2283 annualized. This is a 1.5% increase from the prior dividend of $0.2249. The dividend will be payable on November 21, 2016, to stockholders of record on November 9, 2016, with an ex-dividend date of November 7, 2016. The annual yield on the dividend is 0.8 percent.Get daily under-the-radar research with... Read more

Coal Leads Basic Materials Dogs To Dividend Safety In September

The Dividend Dogs Rule The "dog" moniker was earned by stocks exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." What Basic Materials Sector Industries Show Up As "Safe"? Basic Materials sector industries listing cash margins greater than their announced annual dividends include: coal; steel;... Read more

Stocks Trading Ex-Dividend on 7/5/2016

The following is a list of companies trading ex-dividend on Tuesday, July 5th:Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here. Terreno Realty (NYSE: TRNO) declared a quarterly dividend of $0.18 per share, or $0.72 annualized. The dividend will be payable on July 21, 2016, to stockholders of record on July 7, 2016, with an ex-dividend date of July 5, 2016.... Read more

Stocks Trading Ex-Dividend on 4/4/2016

The following is a list of companies trading ex-dividend on Monday, April 4th:Limoneira (NASDAQ: LMNR) declared a quarterly dividend of $0.045 per share, or $0.18 annualized. The dividend will be payable on April 15, 2015, to stockholders of record on April 6, 2016, with an ex-dividend date of April 4, 2016. The annual yield on the dividend is 0.8 percent.Comcast (NASDAQ: CMCSA) declared a quarterly dividend of $0.275 per share, or $1.1 annualized. This is a 10% increase from the... Read more