This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Comparing Small-Cap Dividend Payers to the Big Guys

NEW YORK ( TheStreet) -- Last week, I espoused the potential benefits of owning stocks that are simultaneously paying dividends, increasing those dividends year after year, and buying back shares.

The combination of the two corporate actions has proven to be quite powerful, at least since I've been studying the concept, and compelling enough for further scrutiny. My initial columns on that subject have focused primarily on larger companies, but I am now expanding my research to include small-cap names.

To that end, I have screened for companies with the following attributes:

  • Maximum Market Cap: $2.5 billion
  • Minimum Market Cap: $250 million
  • Increasing dividends for each of the past 7 years
  • Minimum dividend yield of 1%
  • Decrease in shares outstanding of at least 3% in the past year.

For this search I have relaxed two of the criteria used in the search for larger companies. First, I reduced the minimum yield from 2% to 1%, to reflect the fact that smaller dividend paying companies typically have lower yields. Second, I relaxed the minimum decrease in shares outstanding from 5% to 3%, for similar reasons.

Perhaps not surprisingly given the rather stringent criteria, the list of qualifying companies was quite small, with just five names making the cut. The average market cap was just $1.2 billion, and average dividend yield 2.2%.

At the top of the list in terms of market cap is education provider DeVry (DV - Get Report). The company has reduced shares outstanding in the past year by nearly 5%, and currently yields 1.2%. DeVry, which has more than tripled its dividend since 2006, is trading at less than half of what it was in mid 2011, not an uncommon tale for education related stocks given all of the controversy in that sector in the past few years.

DV Chart DV data by YCharts

Another familiar name ranks second in terms of market cap, casual dining restaurant chain Bob Evans (BOBE - Get Report). The company, which has reduced its shares outstanding by 4.2% over the past year, and currently yields 2.2%, has nearly doubled its dividend since 2008. Bob Evans is a name that has turned up in other value related research that I've conducted, due to its compelling array of assets.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ASEI $39.48 -12.75%
BOBE $44.99 -0.66%
DV $31.08 1.24%
FINL $25.22 -2.02%
WABC $43.41 -0.69%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs