Small-Cap Stars that Pay Out Big

Jacob Harper |

At the beginning of 2013 Equities.com began the Small-Cap Stars project, an effort to identify the strongest plays utilizing sector-specific criteria. As a whole, the index was a success, returning 40 percent, or 7 percent better than the S&P 500.

Not every investor, however, is interested in just returns. There are plenty of stock pickers who favor certainties, like plays that pay out cold, hard cash. That is, investments that pay out a regular dividend.

We decided to go through the Small-Cap Stars and isolate plays that paid out a dividend. Our thinking went like this: a Small-Cap Star that dishes out a solid dividend possesses both a chance for a nice return and an assured check every quarter.

For this, we decided to focus on the Financials sector. We did this because, arguably, Financial plays can “afford” to pay out a dividend without sacrificing growth to a much higher degree than their counterparts, especially those in innovative-driven fields like Tech and Healthcare.

We sorted out all the Financial plays in the Small-Cap Stars project and isolated the ones that pay a dividend of over 5 percent. We found four plays in the Small-Cap Stars project that fit that criteria. They are:

QC Holdings Inc. (QCCO)

Industry: Savings and Loan

Number of Stars: Four out of Five

Market Cap: $33.72 million

Price: $1.94

P/E Ratio: 19.40

Dividend: 10.36 percent

GFI Group Inc (GFIG)

Industry: Investment Brokerage

Number of Stars: Four out of Five

Market Cap: $465.86 million

Price: $3.80

P/E Ratio: N/A (forward P/E is 17.12)

Dividend: 5.17 percent

Gladstone Capital Corporation (GLAD)

Number of Stars: Four out of Five

Industry: Closed-End Fund

Market Cap: $208.95 million

Price: $9.88

P/E Ratio: 6.50

Dividend: 8.44 percent

UMH Properties Inc. (UMH)

Industry: REIT – Diversified

Number of Stars: Two out of Five

Market Cap: $177.52 million

Price: $9.31

P/E Ratio: 465.50

Dividend: 7.73 percent

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
UMH UMH Properties Inc. 12.96 0.13 1.01 69,640
QCCO QC Holdings Inc 0.67 -0.01 -1.98 21,000
GLAD Gladstone Capital Corporation 8.38 -0.07 -0.83 102,617
DRNE Drone Aviation Holding Corp 2.95 0.03 1.03 5,704

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