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- Dividend investing is a popular investment strategy among income investors
- While small caps are often viewed as better suited for growth investing, they can also have high dividend yields
Dividend investing is a popular investment strategy, wherein income investors seek to generate a steady stream of income from dividend pay-outs from their equity investments.
Due to small-cap stocks being typically preferred by aggressive investors seeking high growth, they are often overlooked for income investing.
However, there are several small-cap stocks listed on the London Stock Exchange (LSE) that have a high dividend yield and can make a valuable addition to one’s investment portfolio.
While small-cap stocks can be classified under different criteria for selection, they typically have a market cap ranging between £300 million and £2 billion.
In this article, we take a look at the top 10 LSE listed small-caps tocks with a dividend yield of over 6 per cent:
Globaltrans Investment is an LSE listed and Cyprus based firm that operates in the railway and transport sector. The company is a constituent of the FTSE IOB index.
The firm announced its final and special dividends amounting to a total of RUB 5 billion for FY 2020. The company’s total dividend paid out in FY 2020 thus stands at RUB 13.3 billion.
Globaltrans’ five-year average dividend yield is the highest in the small-cap segment, standing at 11.7 per cent. The company’s market cap stands at £930.68 million as of 27 July.
Blackstone Loan Financing is a closed ended investment company and is listed on the main market.
The firm declared a dividend of EUR 0.0175 per ordinary share for the period between 1 April and 30 June. The ex-dividend date is 5 August, and the payment date is 3 September.
Blackstone Loan Financing’s five-year average dividend yield is the second highest in the small-cap segment, standing at 11.3 per cent. The company’s market cap stands at £930.68 million as of 27 July.
Etalon is a real estate and development firm and is listed on the FTSE IOB index. The group recently announced its unaudited H1 2021 operating results. The group’s new sales rose by 39 per cent to a record RUB 41.147 billion, from 29.522 billion in H1 2020.
Also, its cash collections rose by 30 per cent to RUB 40.9 billion from RUB 31.5 billion from the year before.
Etalon’s five-year average dividend yield is 11.1 per cent. The company’s market cap stands at £350.83 million as of 27 July.
Seplat Energy is an LSE listed oil and gas company focused in the Niger Delta region in Nigeria. The company recently declared a quarterly dividend of 2.5 cents per share, announcing a revised ex-dividend date of 25 May for LSE listed shares, and a qualification date of 26 May for the Nigerian Stock Exchange.
It adopted a quarterly dividend payment schedule from this quarter, changing from its earlier twice a year dividend payment policy.
The company’s revenue rose by 16.8 per cent to US$152.4 million in Q1 2021.
Seplat’s five-year average dividend yield is 9.2 per cent. The company’s market cap stands at £594.33 million as of 27 July.
FTSE 250 index constituent Plus500 is a global online trading platform to trade contracts for difference. The company announced its H1 2021 customer income stood at US$ 379.2 month due to strong customer acquisition. The company’s customer income in H1 2020 was US$ 556.9 million.
Plus500’s five-year average dividend yield is 9.2 per cent. The company’s market cap stands at £1.394 billion as of 27 July.
FTSE IOB index constituent Global Ports is a container terminal operator. It recently announced its Q2 2021 and H1 2021 results. It reported the company’s container throughput rose by 10 per cent to 418 kTEU in Q2 2021 from 380 kTEU in Q2 2020.
Also, the group's consolidated marine container throughput rose by 1.9 per cent in H1 2021 to 789 kTEUs.
Global Ports Investments’ five-year average dividend yield is 8.5 per cent. The company’s market cap stands at £500.38 million as of 27 July.
FTSE All-Share index constituent PayPoint is a multichannel payments solution company.
In its Q1 2022 trading update, the company stated that its net revenue from continuing operations increased by 21.3 per cent to £28.1 million, up from £23.2 million in Q1 2021.
The jump was due to early contributions from its acquisitions of Handepay/Merchant Rentals and also RSM 2000.
It’s final FY 2021 dividend of 16.6 pence per share will be payable in two equal instalments of 8.3 pence per share on 29 July and 30 September.
PayPoint’s five-year average dividend yield is 8.0 per cent. The company’s market cap stands at £398.56 million as of 27 July.
Another FTSE All-Share index constituent Honeycomb is a closed-end investment trust. It recently announced its net asset value (NAV) as of 31 May of 1,029.3 pence per share, on a cum-income basis.
The company’s monthly NAV return for May was at 0.77 per cent, while its annualised NAV return stood at 9.0 per cent.
Honeycomb’s five-year average dividend yield is 7.7 per cent. The company’s market cap stands at £338.49 million as of 27 July.
FTSE All-Share index constituent Real Estate Credit Investments is a real estate investment company.
It declared a fourth FY 2021 interim dividend of 3.0 pence per share. The total disbursement amount stands at £6.879 million, and the payment date is expected to be on 30 July.
Real Estate Credit’s five-year average dividend yield is 7.6 per cent. The company’s market cap stands at £346.29 million as of 27 July.
Kier is a construction and infrastructure business and is also part of the FTSE All-Share index.
The company announced in its FY 2021 trading update that it expects FY 2021 adjusted operating profit margin improvement of about 3 per cent due to several cost saving initiatives.
It also aims to achieve an FY 2021 revenue between £4.0 and 4.5 billion.
Kier’s five-year average dividend yield is 7.5 per cent. The company’s market cap stands at £556.81 million as of 27 July.
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