The Benefits of Lesser-Known Small-Cap Dividend Stocks
I don’t usually talk about dividend stocks. Now, that’s not to say I don’t favor them; it’s just that my specialty is in small-cap stocks and special situations.
But you cannot ignore the fact that strong dividend-paying companies perform very well over the long term—I mean decades. We are talking about the likes of Colgate-Palmolive Company (NYSE/CL) with a 2.3% yield, and The Procter & Gamble Company (NYSE/PG), with a three-percent yield.
Then there are also the traditional dividend payers—the banks.
Yet in these are pricey stocks for some of you who may be looking for more obscure dividend-paying stocks.
Let’s look at a few that offered above-average dividend flow and capital appreciation.
In the investment management sector, take a look at small-cap Och-Ziff Capital Management Group LLC (NYSE/OZM), which is near its 52-week high and pays an impressive 9.9% dividend yield. The company runs money from pension funds and other areas. In the second quarter, Och-Ziff beat on both revenues, up 16.5% year-over-year to $207.8 million, and earnings, beating the Thomson Financial consensus estimate by $0.02, reporting $0.16 per diluted share. According to the company, its assets under management have increased to $36.6 billion as of June 30, 2013, up 12% from the end of 2012.
Chart courtesy of www.StockCharts.com
Also in the investment management area, Fortress Investment Group LLC (NYSE/FIG) looks pretty good as reflected by the steady rise in its stock price since June 2012 (as shown in the stock chart below).
The company manages about $54.61 billion in assets under management as of the end of June, up 14% year-over-year. Fortress also pays out dividends of $0.24 annually for a yield of 3.1%.
Chart courtesy of www.StockCharts.com
My final selection, World Wrestling Entertainment Inc. (NYSE/WWE), is probably not on many investors’ radars.
Imagine grown-up men (and some women) wearing costumes and stage-playing scenarios combined with fake wrestling. (Yes, it is fake folks!) The company takes its show, which I call a soap opera for guys, across the country and into Canada. If you think it’s silly, then consider it also sells out arenas and stadiums. In 2012, World Wrestling Entertainment (WWE) reported close to $1.0 billion in revenues. Don’t forget: it also sells action figurines and apparel through ventures with other companies.
Chart courtesy of www.StockCharts.com
My concern is that prior to the explosive popularity of mixed martial arts, namely the The Ultimate Fighting Championship (UFC), the WWE was really the only game in town. It’s clear the UFC poses a major threat.
But if you are speculative and seeking dividends, which WWE pays at 4.4%, then take a look at this stock. You may also want to watch the show on TV first to get a sense of what the company is about.
So if you are looking for higher dividends and added speculation, take a look at some of the smaller stocks.
For some of my top restaurant stocks, read “My Top Picks for Restaurant Stocks.”
