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Dividend stock investing can be very challenging and even frustrating, as investors struggle to find safe stocks that offer decent yields. Dividend stock investors tend to only focus on large, blue chip stocks and are often disappointed at the marginal returns they receive. While we certainly recommend that investors of all types review the fundamentals of a stock before investing, there are often some undiscovered gems among the oft-neglected small cap sector.
At eDividendStocks.com we have uncovered five small cap stocks offering very attractive dividend yields. These small cap stocks all have market caps of under $1 billion, but they are all profitable companies with reasonable dividend payout ratios.
EarthLink (NASDAQ:ELNK)
The dial-up internet service provider offers investors an impressive 6.7% dividend yield. This cash cow delivered a 27% return to investors in 2009 and holds over $6 per share in cash.
Dividend Yield: 6.7%
Market Cap: 901M
P/E (ttm): 7.5
2010 Revenue Growth: -18.7%
Northwestern Corporation (NYSE:NWE)
This small cap utility stock delivers a 5.2% dividend yield which is considerably higher than many of its large cap peers.
Dividend Yield: 5.2%
Market Cap: 936M
P/E (ttm): 13.6
2010 Revenue Growth: 3.3%
Deluxe Corporation (NYSE:DLX)
This small cap printing firm provides services to small businesses and financial institutions, but offers dividend stock investors an awesome 6.5% dividend yield and trades at a compelling valuation.
Dividend Yield: 6.5%
Market Cap: 803M
P/E (ttm): 7.9
2010 Revenue Growth: -2.4%
CKE Restaurants (CKR)
While CKR’s 3% dividend yield may seem modest compared to some of the other dividend stocks profiled here, the operator of Hardee’s restaurants only pays out 30% of their net earnings and trades well below their 52-week high set back in September.
Dividend Yield: 3.0%
Market Cap: 446M
P/E (ttm): 12.5
2010 Revenue Growth: 2.0%
Navios Maritime Holdings (NYSE:NM)
This small cap shipping company not only provides a solid 3.5% dividend yield, but Wall Street is expecting Navios to deliver 13% sales growth this year. Their stock chart looks very impressive, after more than doubling their stock price in 2009.
Dividend Yield: 3.5%
Market Cap: 707M
P/E (ttm): 14.5
2010 Revenue Growth: 13.2%
We always encourage investors to perform their own research before investing in stocks. However, as you can see in this article there are attractive stock picks for dividend investors among even small cap stocks.
Disclosure: No Positions
Source: 5 Small Cap Dividend Stocks to Consider