Two small-cap stocks with dividend yields of over 8%

Summary

  • Investors are always in search of high dividend yield stocks to boost their income.
  • The market has a keen interest in the ASX shares that may have low market capitalisation but offer high dividend yields.
  • But investors must also consider their volatile nature while investing in them.

Investors are always in search of high dividend yield stocks to boost their income. Such stocks hold more importance when the Australian economy is recovering from the COVID-19 pandemic-induced challenges.  

The market has a keen interest in ASX shares that may have low market capitalisation but offer high dividend yields. In addition, small caps can be easily owned by an average investor compared to blue-chip stocks since they are relatively cheaper to buy.

But investors must also consider their volatile nature while investing in them as a very high dividend yield is not always a healthy aspect.

On that note, let us zero in on two stocks in the small-cap segment paying maximum dividend yields:

Source: ©Miflippo  | Megapixl.com

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Pacific Current Group Ltd (ASX:PAC)

Pacific Current Group is among the most sought small-cap shares with high dividend yields. The global asset management firm has paid an annual dividend of AU$0.35 per share in the last 12 months, implying a grossed-up dividend yield of 8.9%.

Source: © Herrbullermann  | Megapixl.com

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The asset management firm combines capital with strategic business development to help investment managers grow. GQG, ROC, Carlisle, Proterra and Victory Park are some of the major investments made by the Group. Moreover, in December 2020, the company announced it will buy a minority stake in Astarte Capital Partners.

Meanwhile, the shares of Pacific Current Group have offered a negative return of nearly 13% YTD (till May).

Pengana Capital Group Ltd (ASX:PCG)

Pengana Capital, which is involved in fund management and aims to increase investor wealth, had said that it would diversify over time by incorporating new strategies. In its update for the six months to December 2020, the fund manager said that the funds under management (FUM) rose by 15%. The company also said that it was growing FUM on higher-margin products.

Pengana increased its interim dividend by 25% to 5 cents per share in the half-year results, bringing the trailing annual payout to 9 cents per share. It implies a grossed-up dividend yield of 8%.

Meanwhile, the shares of Pengana Capital Group gave a return of nearly 2% YTD (till May).

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