Last winter's storms produced a spike in natural gas purchases to the tune of $2 billion, which was met with the issuance of $2.5 billion of new debt. Currently, the stock is off about 25% from its record peak of $96 from February 2020. Shares have more than doubled over the last seven years, and hit new all-time highs right before the onset of the pandemic. ONE Gas ( OGS, $72.88) was a spinoff from much larger utility ONEOK ( OKE) in 2014, and today offers natural gas services to 2 million customers in Kansas, Oklahoma and Texas. And it seems safe, too, representing just 22% of Value Line's estimated 2021 cash flow per share of $7.20. At the current yearly disbursement of $1.60 per share, the company has grown its dividend at a very handsome 17.5% average annually over the last five years. MDC is another one of the small-cap dividend stocks featured here that's steadily increased its payout to shareholders. In the second quarter, MDC saw a 290 basis-point (a basis point is one-one hundredth of a percentage point) increase in its gross margin, which shows how much of each dollar in revenue the company keeps as profit. Sales growth is all well and good, but what's neat at MDC is that the company has been careful with costs and brought more earnings to the bottom line. On an annualized basis, six-month earnings are running north of 40% over 2020's full-year results. Second-quarter home sales revenue and net income were up 54% and 83%, respectively, over their year-ago levels. This differential is notable, since MDC is delivering results typically associated with high-growth stocks. The shares are trading at just 5 times the Street's 2022 earnings estimate, a significant discount to the Russell 2000's forward price-to-earnings (P/E) ratio of 27.6. And, by some measures, this dividend stock is cheap. The work-from-home mandate and its likely permanence in one form or another, as well as the migration of millennials into their prime home-buying years, have all given MDC a strong hand to play.
Holdings ( MDC, $52.00) has been cashing in on the housing boom that's been underway during the COVID-19 pandemic. The dividend has grown at a healthy rate of just under 5% for the last five years, with a current yield of 2.9%. Plus, this is one of the small-cap dividend stocks that has steadily increased its annual payout to shareholders every year since 2013.
The dividend stock has hit new highs every year over the past five years, except for 2020, and is currently trading less than 6 percentage points below its 2019 peak. Management is feeling confident and recently raised its earnings per share (EPS) guidance to $3.50 to 3.65 for fiscal 2021, up from its May forecast of $2.47 to $2.62 per share. The gain in operating income has come from cost containment and base rate growth. This offers investors a slight hedge against an overreliance on power generation, which can come in the form of price spikes and rate regulation.įor now, that's not needed, as operating income from the company's power generation division in 2020 was up nearly 22% from 2018, notable in a segment not known for double-digit growth. But the balance comes from a manufacturing and plastics operation. About 75% of its business comes from power generation across a portfolio of renewable and non-renewable sources in North and South Dakota, as well as Minnesota.
Otter Tail ( OTTR, $53.54) is a utility company with a twist. But the payoff can be nice for investors willing to accept more risk, especially when there's an attractive dividend to boot. Keep in mind, though, that buying shares of any small company – even one with an attractive payout – can be risky, given their shares are prone to make volatile moves in either direction. That said, here is a list of six small-cap dividend stocks to buy now. Worth keeping in mind is that paying and growing a dividend takes financial strength, too, which can help investors sleep better at night in an all-too volatile world. Small caps are often described as "bunny stocks" because they can sit for a while then hop. Many of the small-cap dividend stocks shown here have done just that, displaying lackluster performance during shorter time frames, but consistently hitting new highs over the long term.Īnd combined with a hefty and growing dividend, these small-cap stocks have provided investors with compelling total returns over the long haul. But the small-cap dividend stocks featured here all have yields north of 2.5%. In fact, the dividend yield on the iShares Russell 2000 ETF ( IWM) – the exchange-traded fund that tracks the Russell 2000 index of small-cap stocks – is about 0.8%.
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