The recent rally in broader markets, boosted by the Federal Reserve’s decision to keep rates unchanged, has opened doors for small-cap stocks to join the celebratory parade.
What’s more exciting is the surge in stock prices of a few small-cap companies with substantial dividend yields, making them all the more attractive as concerns about the wider economy continue to diminish.
Deluxe DLX
Deluxe Corporation, a payment solutions provider, is making heads turn with its stock trading around $20 and boasting a 6.15% annual dividend yield.
Despite market oversight, the company’s financial metrics such as EV/EBITDA and price to cash flow (P/CF) indicate undervaluation, along with a high return on equity (ROE).
Image Source: Zacks Investment Research
FAT Brands FAT
Selling at $5 a share, FAT Brands stock is an eye-catcher, especially given that its Zacks Retail-Restaurants Industry is among the upper echelons of all Zacks industries.
Despite the absence of operating profits, FAT Brands has increased its dividends thrice in the last 5 years, currently offering an attractive yield of 9.59%.
Image Source: Zacks Investment Research
Janus Henderson Group JHG
Priced just under $30 a share, Janus Henderson Group’s stock, with a market cap under $10 billion, stands out as a value play.
The investment management company offers a 5.44% annual dividend yield and has shown substantial earnings growth potential.
Image Source: Zacks Investment Research
Why This Matters
These small-cap stocks appear primed for further gains and seem poised to continue riding the recent market upswing. Deluxe, FAT Brands, and Janus Henderson’s stock all hold a Zacks Rank #2 (Buy), and their substantial dividends make them even more compelling at this juncture.
Didn’t your grandma say, “The early bird gets the worm”? Well, with these stocks, it seems like the early bird might just get the whole farm! With dividend yields over 5%, investors could soon be laughing all the way to the bank.
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Deluxe Corporation (DLX) : Free Stock Analysis Report
Janus Henderson Group plc (JHG) : Free Stock Analysis Report
FAT Brands Inc. (FAT) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
