Dividend Investing Ideas Center
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A small cap company is defined as a company that has a market cap between $300 million to $2 billion. These ranges are only approximations and can change from investor to investor or from brokerage to brokerage.
We recently analyzed 5 regional banks that are less than $2 billion in market cap and have a strong dividend paying history. Below we’ll analyze 5 small cap services stocks that are less than $2 billion in market cap that have a strong dividend paying history.
Small cap companies are lightly traded, can often be acquisition targets and may have a valuation opportunity that investors can exploit due to perpetual neglect by the markets.
When stocks have a market cap of less than 2 billion their public float is often less. This doesn’t encourage institutional investors to invest in these companies as they find it hard to place bulk buy/sell orders.
This company has a market cap of $1.94 Billion and is primarily into death-care and offers burial caskets, cremation products and related services. Hillenbrand Inc. (HI ) was formerly known as Batesville Holdings Inc. and changed its name in 2008. It has a dividend paying history since 2008 and currently pays a an annual dividend of $0.81 which yields to 2.68%. Since it started paying a dividend it has increased its payout consecutively every year. Trading at a P/E of 14.58 based on 2016 earnings estimates Hillenbrand provides good exposure to the business of death – Check out our analysis of all the companies involved in death care here .
Brinks Co. (BCO ) has a market cap of $1.41 billion and is a global leader in security-related services that operates two businesses: Brink’s Incorporated and Brink’s Home Security. Brink’s Incorporated is the world’s premier provider of secure transportation and cash management services. Brink’s Home Security is one of the largest and most successful residential alarm companies in North America. Brinks has a dividend paying history since 1996. It has an annual payout of $0.40 and currently yields 1.42% based on its current share price of $28.18. Currently trading at a P/E of 17 based on 2016 earnings per share of $2.04, analyst estimates point to a 9.8% growth in the bottom line for 2017.
Ruths Hospitality Group, Inc. (RUTH) has a market cap of $561 million. They own and operates franchises restaurants in the United States. The company owns the Ruths Chris Steak House, Mitchells Fish Market, Columbus Fish Market, Mitchells Steakhouse, and Camerons Steakhouse. RUTH is a fairly new dividend payer and has a dividend paying history dating back to 2013 when they paid out their first dividend of $0.04. Their current payout is $0.07 on a quarterly basis which amounts to $0.28 on an annual basis.
Find a complete list of restaurant stocks that pay a dividend here .
ABM Industries (ABM ) is a dividend aristocrat that features in this list having raised its dividend consecutively for 48 years. ABM has a dividend paying history since 1968 and currently yields 2% as they payout $0.66 annually. It’s market cap is $1.87 Billion which classifies it as a small cap stock.
ABM Industries provides janitorial, parking, security, engineering, and lighting services for commercial, industrial, institutional, and retail facilities in the United States and in British Columbia, Canada.
2016 EPS estimates have come in at $1.57 while 2017 EPS estimates have come in at $1.81 which point to a 15% growth. The stock is not cheap as it trades at 20 times 2016 P/E.
Headquartered in Milwaukee, Wisconsin, The Marcus Corporation (MCS) is a leader in the lodging and entertainment industries. Marcus currently owns or manages 678 screens at 56 locations in Wisconsin, Illinois, Minnesota, Ohio, North Dakota, Iowa and Nebraska, and one family entertainment center in Wisconsin.
Marcus has a market cap of $526 million and has a dividend paying history since 1990. MCS currently yields 2.23% and currently has a payout ratio of 37% which leaves ample room for the company to grow its dividend. MCS has grown its dividend at 3.8% on an annualized basis over the last 5 years. The stock trades at 17 P/E and is currently off by 10% from its 52-week high.