We're always talking about dividends as a solid hedge to the market's ups and downs, and we can never get enough names into the mix for possible portfolio inclusion. Most investors look at the blue chip stocks for dividends, but small caps also offer high dividend yield. These small cap stocks have low beta and significant EPS and dividend growth in the next few years. Here is a list of small cap dividend stocks to place on your buy list.
MicroFinancial Incorporated (MFI) operates primarily through its wholly owned subsidiaries, TimePayment Corp. (TimePayment) and Leasecomm Corporation (Leasecomm). TimePayment is a specialized commercial finance company that leases and rents microticket equipment and provides other financing services. MFI provides financing alternatives to a wide range of lessees ranging from start-up businesses to established enterprises.
MFI is a small cap stock with a market cap of $97 million. MFI is trading at $6.83 with a PE of 10.95. MFI is undervalued by 6% with an enterprise value of $103 million. MFI has a current dividend yield of 3.5%, which was increased 20% in Q4 of 2011. Unlike the typical small cap stock, MFI has a 1-year beta of 0.06. MFI has an equity summary score of 9.8 out of 10 for a Very Bullish outlook. The First Call Consensus is a Strong Buy.
Homeowners Choice, Inc. (HCII), an insurance holding company, provides property and casualty insurance in Florida. The company provides property and casualty homeowners' insurance, condominium owners' insurance, and tenants' insurance to individuals owning property. HCII has a market cap of $79 million. HCII is trading at $12.58 with a PE of 9.3. HCII has a current dividend yield of 6.56%, which has been increased in four straight quarters. HCII has a dividend payout ratio of 35%. EPS growth for this year is 61% and 26% for 2013. HCII has a 1-year beta of 0.13 with no long term debt. HCII has an equity summary score of 9.5 out of 10 for a Very Bullish outlook. The First Call Consensus is a Strong Buy.
Orchids Paper Products Company (TIS) engages in the manufacture and sale of various private label tissue products for the consumer market. Its products include paper towels, bathroom tissue, and paper napkins. TIS has a market cap of $135 million. TIS is trading at $17.93 with a PE of 22.0. TIS has a current dividend yield of 4.45% that was increased 100% in Q4 2011. TIShas the highest dividend yield in the household products industry. TIS has a dividend payout ratio of 60%. EPS growth for the next year is projected to be 13%. TIS has a 1-year beta of 0.27 with a long term debt to equity of 23%. TIS has an equity summary score of 10 out of 10 for a Very Bullish outlook. The First Call Consensus is a Strong Buy.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.