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TheStreet Open House

The Top High-Yielding Small-Cap Stocks

There's nothing better than a small-cap stock that pays a nice dividend.

There's usually a certain amount of risk involved when you invest in a small-cap stock, but a stock that pays a steady dividend takes some of that risk out of the equation. Small-caps that pay dividends make up an overlooked area of investing. In addition to reducing risk, these types of stocks allow diversification into smaller companies with the advantage of a dividend yield to help accelerate the return of capital.

When screening for small-caps with high yields at Stockpickr, we used a capitalization range of $250 million to $500 million. This eliminates real estate investment trusts, closed-end funds and oil income trusts. The Stockpickr portfolio of the highest-yielding small-cap stocks is worth a look.

Also available on Stockpickr is a portfolio set up by one of my favorite bloggers, The Microcap Speculator. He has created a portfolio that details micro-caps with dividends.

There are a number of small-cap stocks with high yields from various industries to choose from. The highest yielder is U.S. Shipping (USS), which offers a dividend yield of 9.8% with a capitalization of about $330 million. The company transports petroleum with its maritime fleet of tank vessels, and the stock has a fairly high price-to-earnings ratio of 42.4.

Quarterly earnings at U.S. Shipping were up 37% year over year on a 13% increase in revenue. The company has paid the same dividend, 45 cents per share, for the past nine quarters in a row. The company is also on a list we set up called the 9% Yield Club, which includes Nelson Peltz investment vehicle Deerfield Triarc Capital (DFR).

How does billionaire Peltz get such yields? We track the Nelson Peltz portfolio here, which includes holdings such as Wendy's (WEN) and H.J. Heinz (HNZ).

Which small-caps with steady dividends would you consider investing in?
Answer Here

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