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
