Dividend small cap stocks often go overlooked by investors. Most of the time, dividends aren’t thought of when thinking of small-cap stocks. Nevertheless, some of these small companies also pay large dividends…
I’ve included a list of some of the best dividend small cap stocks below. Even though these companies lack the scale and deep pockets of Big Tech darlings, they could offer you big returns.
Also, consider using our free Dividend Reinvestment Calculator. You can use this tool to estimate the growth of your investments over time.
10 Dividend Small Cap Stocks To Consider
- Sixth Street Specialty Lending (NYSE: TSLX)
- Crestwood Equity Partners (NYSE: CEQP)
- Hercules Capital (NYSE: HTGC)
- USA Compression Partners (NYSE: USAC)
- Green Plains Partners (Nasdaq: GPP)
- American Finance Trust (Nasdaq: AFIN)
- SuRo Capital Corp (Nasdaq: SSSS)
- Ready Capital (NYSE: RC)
- Ellington Financial (NYSE: EFC)
- Ennis (NYSE: EBF)
It’s good to consider these companies if you’re looking for high-dividend small cap stocks. However, you should be aware that they are higher risk. So, make sure you do your own research before you purchase.
Sixth Street Specialty Lending
Dividend Yield: 7.34%
Sector: Financial Services
Sixth Street Specialty Lending is a finance company. It delivers financial solutions to middle-market companies. Its customers come from a wide range of U.S. industries.
The firm partners with companies to provide up to $300 million. It also arranges syndicated transactions up to $500 million. This helps the company construct a well-diversified, low-volatility portfolio.
Investment experts make Sixth Street Specialty Lending’s investing decisions. As of September 2021, the company’s active portfolio is structured across 67 companies with a fair value of around $2.4 billion.
Crestwood Equity Partners
Dividend Yield: 10.26%
Sector: Energy
Crestwood Equity Partners is a master limited partnership (MLP) that operates across the United States. The firm operates in gathering, storing, processing and supplying energy. The company owns and operates midstream assets located in the Bakken Shale, Delaware Basin, Powder River Basin, Marcellus Shale and Barnett Shale.
This dividend small cap company has a goal to create long-term value for its shareholders. It aims to do this by increasing cash flow from development projects. Growing the company while maintaining financial strength is the company’s objective.
If you’re interested in other energy investing opportunities, check out these energy penny stocks to consider.
Hercules Capital
Dividend Yield: 8.17%
Sector: Financial Services
Hercules Capital is a business development company. It’s the largest non-bank source of venture lending in the market. The firm serves technology, life science, renewable and other industries.
Hercules Capital helps find solutions that match a company’s existing capital structure. The firm finds new approaches to solving problems based on a company’s business objectives. As of August 2021, the firm achieved more than $12 billion in capital commitments to more than 530 companies since its inception.
USA Compression Partners
Dividend Yield: 14.2%
Sector: Energy
USA Compression Partners is one of the largest third-party providers of compression services in the oil and gas industry. The company partners with producers, processors, gatherers and transporters of natural gas and crude oil.
USA Compression Partners focuses primarily on large-horsepower applications. The company provides natural gas compression services for infrastructure applications. This includes high-volume gathering systems, processing facilities and transportation applications.
Green Plains Partners
Dividend Yield: 12.48%
Sector: Alternative Fuels
Green Plains Partners provides biofuel storage, terminal and transportation services. The company has a network of biofuel storage facilities across Indiana, Illinois, Iowa, Minnesota, Nebraska and Tennessee. The 32 facilities produce close to one billion gallons of biofuel every year. Additionally, its biofuel storage assets have a combined storage capacity of approximately 32 million gallons.
This dividend small cap company also provides terminal services and logistics solutions across its eight locations. Its transportation assets include its leased railcar fleet that transports products under commercial agreements with its parent company.
To see other fuel investing opportunities, here are 4 hydrogen fuel cell stocks to consider.
American Finance Trust
Dividend Yield: 10.46%
Sector: Consumer Services
American Finance Trust owns and manages a diverse portfolio of commercial properties, most of which are freestanding, single-tenant properties. The company has invested in 968 properties across 47 states. Its real estate investments are worth $4.2 billion.
The company’s investment strategy aims to execute primarily long-term leases with a minimum lease term of 10 or more years. It targets a loan-to-value ratio of less than 45% and diversifies its portfolio by geography, tenant and lease terms.
Ready Capital
Dividend Yield: 11.13%
Sector: Consumer Services
Ready Capital is a non-bank real estate and small business lender. The mortgage REIT started in 2011. Since then, the company has provided over $3 billion in capital across the United States.
Ready Capital lends up to $45 million on multifamily and commercial real estate. The company is an approved Freddie Mac Small Balance Loan (“SBL”) lender and an SBA Preferred Lender. Additionally, it provides residential mortgage lending through its subsidiary, GMFS.
Ellington Financial
Dividend Yield: 11.33%
Sector: Consumer Services
Ellington Financial operates as a mortgage finance company. It invests in residential and commercial mortgages, asset-backed backed securities, consumer and collateralized loans, derivative securities and equity investments.
Ellington Financial serves investors in the United States. Furthermore, the company is externally managed by and advised by Ellington Financial Management LLC.
Ennis
Dividend Yield: 5.21%
Sector: Consumer Services
Ennis operates in wholesale print manufacturing. With more than 110 years of experience, the company is a leading manufacturer of print products. The company offers forms, labels, tags, envelopes, folders and more.
Ennis’ network is made up of 40 brands to offer a wide variety of products to the industry. Furthermore, it operates more than 55 locations across the United States.
SuRo Capital
Dividend Yield: 65.15%
Sector: Financial Services
SuRo Capital is an investment company that is externally managed and non-diversified. The investment goal of the company is to maximize its portfolio’s total return. So, it does this primarily through capital gains on equity and equity-related investments.
This dividend small cap stock invests in public and private companies in the United States and across the globe. It targets companies that operate in social media, mobile computing and apps, cloud computing, software services, green technology and education technology. As an example, companies such as Palantir and Coursera are among SuRo Capital’s investments.
However, with the highest yield on this list, this company carries the most risks. So, you should always do your own research and know the risks before investing.
The Bottom Line on Dividend Small Cap Stocks
Investors with a low risk tolerance may want to avoid stocks that pay high dividends. When it comes to dividend small cap stocks, you should make sure they are sustainable and the company is in good financial health.
Nevertheless, there are always risks when you invest. So, you should do your research before you decide to invest. Furthermore, to diversify your portfolio and minimize risk, invest in a range of different companies.
For more investment opportunities with high dividends, check out these high-yield dividend stocks. However, their yields aren’t as high. Although, the payout safety is much better.
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