1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Articles (956) 

7 Small-Cap Dividend Stocks for Yield and Growth

Once a company reaches a certain size, significant growth is difficult to sustain. It is often easier achieve 10% growth in a $10 million company than growing a $10 billion dollar company 10%. Knowing this, savvy investors looking for growth will turn to small-cap stocks.

Consider what Warren Buffett has to deal with. His investments have grown so large that it is difficult to achieve the same growth rates as the early years. Being so large, Buffett is forced to take significant positions and only select from the best of large-cap stocks. This dramatically limits his investment options.

In 1999 during Berkshire Hathaway's (NYSE:BRK.A) shareholder meeting, Buffettstated that he could generate 50% returns if only he had less money to invest and focus on small companies. It's the smaller, faster growing companies that typically offer the highest returns.

Small caps tend to be thinly traded and often not closely followed by analysts. This provides opportunity for identifying stocks trading at a significant discount to their intrinsic value.

This week, I screened my dividend growth stocks database for small- and mid-cap stocks (using Morningstar's classification) with a yield and dividend growth at or above 4%. The results are presented below:

Omega Healthcare Investors Inc. (NYSE:OHI)

Yield: 8.5% | Dividend Growth: 9.0%

Omega Healthcare Investors Inc. is a real estate investment trust (REIT) that invests in and provides financing to the long-term care industry. Its portfolio includes health care facilities in 27 states.

United Community Bancorp (NASDAQ:UCBA)

Yield: 7.8% | Dividend Growth: 7.3%

United Community Bancorp owns United Community Bank, which provides banking services and products to consumers and businesses in southeastern Indiana.

Buckeye Partners LP (NYSE:BPL)

Yield: 6.3% | Dividend Growth: 5.5%

Buckeye Partners LP is one of the largest independent U.S. pipeline common carriers of refined petroleum products, with over 5,400 miles of pipeline.

Cheviot Financial (NASDAQ:CHEV)

Yield: 5.5% | Dividend Growth: 9.1%

Cheviot Financial owns and operates Cheviot Savings Bank, which provides commercial banking services in southwestern Ohio.

Harleysville Group Inc. (HGIC)

Yield: 5.2% | Dividend Growth: 8.0%

Harleysville Group Inc. underwrites a broad array of personal and commercial coverages. These insurance coverages are marketed primarily in the Eastern and Midwestern United States.

UniSource Energy (UNS)

Yield: 4.4% | Dividend Growth: 7.7%

Unisource Energy, through Tucson Electric Power Co., provides regulated electric service to over 392,000 retail customers in Southeastern Arizona.

Avista Corporation (NYSE:AVA)

Yield: 4.3% | Dividend Growth: 8.8%

Avista Corp. generates, transmits and distributes energy as well as engages in energy-related businesses. The company operates in two business segments.

As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However, some of the others may be worth additional due diligence.

My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 210+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.

Full Disclosure: Long OHI, HGIC. See a list of all my dividend growth holdings here.

Related Posts

- Three Dividend Stocks With A Perfect Risk Score

- Protecting Your Dollars With Foreign Currency

- How To Maximize Your Dividend Stocks' Earnings

- High Yield, High Risk Dividend Stocks

- How Much Money Will You Need For Retirement?

About the author:

Visit Dividends4Life at:

Rating: 4.0/5 (6 votes)


Please leave your comment:

Performances of the stocks mentioned by Dividends4Life

User Generated Screeners

daftheadersg hk best
henrikLynch inspiret Oct 17
lajor10Low EV/EBITDA
canidPE >50th percentile of INDUSTR
brucexoct 17 user defined screen
AngryQuality Growth cheap
EnjoylifeDad 1
punjanoot2007a academy+joe
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat