Under the Radar: Interactive Data Pays Back

"Under-the-Radar Stocks" is a daily feature that uncovers little-known companies worthy of investors' consideration. Check in at 5 every morning to find out about stocks that tend to beat their bigger brethren.

Tech and financial companies will likely remain in the spotlight as investors prepare for a week of positive economic data. Here's a small-cap stock that pays a hefty dividend and offers exposure to hot sectors.

Bedford, Massachusetts-based Interactive Data(IDC Quote) provides market information and analysis to financial institutions, traders and investors. The company was formed in 1968 when Computer Communications Center merged with the interactive data-services division of White, Weld & Co. Since then, the company has established a profitable foothold in the finance industry. We rate Interactive Data "buy" with a grade of B-plus.

The company's first-quarter revenue rose 2% to $186 million from a year earlier. The strong U.S. dollar hurt international sales. Excluding foreign-exchange losses, the company said sales would have risen 8.4%. Net income declined a marginal 1% to $32 million and earnings per share remained flat at 33 cents.

Even though crumbling capital markets forced banks and trading firms to cut costs, the company maintained a retention rate of 93%, which bodes well for long-term stability. Revenue increased at all of the company's institutional businesses.

Interactive Data has no debt. The company boosted its cash and marketable securities by $15 million to $244 million, including $159 million of cash, since last year's first quarter. We give Interactive Data a high financial-strength score of 7.9 out of 10.

Weak earnings performance has dragged the stock down 7.4% this year, while the Nasdaq has risen 13%. Still, Interactive Data offers a 3.6% dividend yield, higher than the 3.1% average for the S&P 500 Index.