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). 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 data by YCharts
Another familiar name ranks second in terms of market cap, casual dining restaurant chain Bob Evans (BOBE). 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.
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