A low-priced small-cap stock with a dividend can look quite tempting to the inexperienced. That lower price should mean a higher yield, plus the chance for growth, right? Wrong. Small-cap stocks that offer a dividend instantly put me on the alert. If a company has less than $2 billion in market capitalization, typically it does not offer a dividend because it’s reinvesting every dime of profits back into the company. It’s still trying to grow organically from infancy to become a midcap and eventually a large-cap stock.
When you do find a small-cap stock that offers a dividend, it’s typically a “sinking ship” kind of situation. Companies like that have lost their fundamental growth story and are desperate for investor interest, so they’ve turned their stock into an income idea just to keep money coming in the bank. If you do find a small cap that pays a dividend, it’s likely at risk for return of capital — meaning the money you buy the stock with is essentially returned to you in the dividend payment.
Source: InvestorPlace
Related Articles:
- 9 High Rated, Lower Debt Dividend Stocks With A Reasonable Payout
- 4 Dividend Stocks To Avoid The Social Security Blues
- Who is Ben Grossbaum and Why Should We Listen to Him?
- 9 High-Yielding Mega-Cap Stocks
- Best Stocks for 2013
Small-Cap Stocks With High Yield
Posted by D4L | Saturday, June 29, 2013 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Dividend Growth Stocks News
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.