Top 5 small-cap stocks to buy in 2022

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Highlights

  • Investors who have a higher risk appetite can look to invest in small-cap stocks, which are also considered growth stocks.
  • Investors who have a higher risk appetite can look to invest in small-cap stocks that can deliver superior returns to investors if the company’s underlying business model outperform.

The stock market is organized in such a manner that it is suitable for all kinds of investors. Investors with a low risk-taking appetite can invest in blue-chip stocks, which generates consistent cash flow from their underlying businesses. On the other hand, investors who have a higher risk appetite can look to invest in small-cap stocks, which are also considered growth stocks. Most of these companies are in the initial stages of their business growth, having lower market cap than blue-chip stocks.

However, some of these companies can deliver superior returns to investors if the company’s underlying business model outperform. Investors should do in-depth research while selecting the stock and stay invested for the long term for a high return on investment.

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Let us look at 5 FTSE listed small-cap stocks and their investment prospects:

Keller Group Plc (LON: KLR)

The company operates in the engineering segment, offering services like ground improvement for new construction, slope stabilisation, build-up of heavy foundation and other services. The company’s business continues to witness sound recovery after the Covid-19 pandemic. As per the company, the overall performance for the year is expected to be in line with the market expectations. Its current order book is at a record level of £1.2 billion.

Keller Group Plc current market cap is £647.28 million, while its current dividend yield stands at 4.1% as of 19 November 2021.

Hansard Global Plc (LON: HSD)

The company operates in the financial sector offering savings and investment products to retail and institutional investors. The company has £1.22 billion of assets under administration (AuA) as of 30 September 2021 and reported £31.4 million in new business during the period. The company is planning to launch its business in Japan with the start of its first distribution partner and expects to deliver positive growth after the launch.

Hansard Global Plc current market cap is £69.47 million, while its current dividend yield stands at 9.3% as of 19 November 2021.

Bakkavor Group Plc (LON: BAKK)

The company operates in the food business, offering meals, bakery products, pizzas and sandwiches in the UK and the US markets. The company reported £915.7 million in revenue from its underlying business, while its operating profit rose by 63.8% to £47 million in the 26 weeks ended 26 June 2021 despite multiple challenges like labour shortage, supply chain disruption and increase in raw material prices due to inflation. Due to encouraging volumes in the first half of the financial year, the company expects to deliver growth in the remaining half of the current financial year.

Bakkavor Group Plc current market cap is £701.10 million, while its current dividend yield stands at 6.7% as of 19 November 2021.

PayPoint Plc (LON: PAY)

The company offers various services like transaction processing of consumer electricity bills along with other products and services. It reported a revenue of £28.1 million, a rise of 21.3% in the three months ended 30 June 2021. The company generated its revenue from the diversified business segment. The shopping segment contributed 50.4% of revenue, while 45.8% of revenue came from the payment and banking segment. E-commerce division revenue stood at 3.8%. The company has a network of 28,436 retail sites and is slowly and steadily generating more revenues from other businesses.

PayPoint Plc current market cap is £447.52 million, while its current dividend yield stands at 5.1% as of 19 November 2021.

DWF Group Plc (LON: DWF)

The company provides professional business services like legal services in the UK and Middle East countries. The legal service provider reported net revenue of £338.1 million, a rise of 14% in the financial year ended 30 April 2021. All the key business segments of the company reported growth. The company expects a favourable trading environment in the new financial year. As a result, it anticipates net revenue growth in the range of 6% to 7%, while gross margin is expected to increase to 53% to 54%.

DWF Group Plc current market cap is £351.38 million, while its current dividend yield stands at 4.1% as of 19 November 2021.


 

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