The S&P SmallCap 600 advanced 31.2% for the last 26 weeks through March 30, outpacing the S&P 500's 22.3% rise. This is a big turnaround for the small-cap index, which fell 0.2% in 2011. If you missed this small cap rally, there are still opportunities available in specific stocks. This opportunity is in high quality rated small caps with good dividend yields. The following stocks have a bullish outlook, good dividend yields and room for future earnings growth.
Insperity, Inc. (NSP) provides an array of human resources (HR) and business solutions to help enhance business performance for small and medium-sized businesses. The fundamental outlook for the human resource & employment services sub-industry is positive. The U.S. economy is in the midst of a recovery, and initial reports indicate the labor market is also in the midst of a revival from the major downturn experienced in 2008 and 2009. Thus, we expect the sub-industry to post solid gains in both revenues and earnings over the coming year. NSP is a high growth stock that pays a nice dividend. NSP is trading at $31.05 with a market cap of $796 million. NSP is projected to grow earnings at 34% over the next 3 to 5 years. This growth is not priced into the stock as it has a PEG ratio of 0.78. NSP has a dividend yield of 1.96% with a 50% payout ratio. NSP has an equity summary score of 9.4 out of 10 for a Very Bullish outlook.
McGrath RentCorp (MGRC), a diversified business to business rental company, engages in the rental and sale of relocatable modular buildings, electronic test equipment, and liquid and solid containment tanks and boxes primarily in the United States and Canada. Revenues for the year ended December 31, 2011 were $342.7 million vs. $291.4 million in the prior year, moving ahead 18% year over year. Gross margin widened 7%, on higher revenues. In February 2012, MGRC projected 2012 full year earnings to be in the range of $2.02 to $2.12 per share. In 2012, MGRC expects about 8% to 10% growth in rental operations revenues over 2011 and sales revenues comparable to 2011. MGRC is trading at $32.46 with a market cap of $790 million. MGRC is projected to grow earnings at 12% over the next 3 to 5 years. MGRC has a dividend yield of 2.93% with a dividend growth rate of 8%. MGRC has an equity summary score of 9.2 out of 10 for a Very Bullish outlook.
Computer Programs and Systems, Inc. (CPSI), a healthcare information technology company, designs, develops, markets, installs, and supports computerized information technology systems to small and midsize hospitals in the United States. The fundamental outlook for the health care technology sub-industry is positive for the next 12 months. CPSI is trading at $56.24 with a market cap of $625 million. CPSI's earnings for the year 2012 are projected to advance roughly 15%. CPSI is projected to grow earnings at 17% over the next 3 to 5 years. CPSI's operating return on assets is 56.96% versus the group's median of 12.27%. CPSI has a dividend yield of 3.26% with a 61% payout ratio. CPSI has an equity summary score of 7.1 out of 10 for a Bullish outlook.
Tupperware Brands Corporation (TUP) operates as a direct seller of various products across a range of brands and categories through an independent sales force worldwide. Recently, TUP was recognized as one of the "World's Most Admired Companies" in the Home Equipment category of the annual ranking from FORTUNE. The company is an emerging markets growth-driven story, with certain challenges in some mature markets. Europe and Asia Pacific is expected to account for well over two-thirds of the company's segment operating profit in 2012 and 2013. TUP is trading at $64.12 with a market cap of $3.5 billion. TUP is projected to grow earnings at 12% over the next 3 to 5 years. TUP has a dividend yield of 2.27% with a dividend growth rate of 10%. TUP has an equity summary score of 8.1 out of 10 for a Bullish outlook.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.