Dividends are a great way to enhance your returns. But more important than the dividend itself is whether your dividend payer can continue to pay month after month.
These 4 smallcap companies are doing the right things to ensure they have a safe dividend for the foreseeable future. Put your mind at ease, and lock in these great dividends that will pad your portfolio returns.
CHS, Inc. (NASDAQ: CHSCP) is a stock you’ve probably never heard of. The farm co-op company trades in a very narrow range and spins out a $2.00 dividend, or 7.15% a year.
The company trades in a narrow range, staying between $27 and $35 the past two years. So if you’re looking for stock performance, CHS may not be for you. But, if your focus is dividends, the company backs its current $2.00 payout with $43.34 cash per share.
If you believe the current economic climate has staying power, and that the best days are still ahead, then PennyMac Mortgage Investment Trust (NYSE: PMT) may be for you. The distressed mortgage investor pays a 9.47% dividend.
Though it’s a distressed mortgage investor, don’t fret before giving the company a look. Strengthened mortgage rules after the last financial crisis mean “distressed” isn’t quite what it used to be. PennyMac also holds $11.71 in cash per share to cushion any bumps in the dividend cycle.
GasLog Partners LP (NYSE: GLOP) owns and operates liquified natural gas carriers. The company, based in Monaco, currently has 12 vessels that it operates. GasLog has been steadily increasing its dividend.
Currently paying an 8.46% dividend, the company has $3.35 in cash per share on the books. With a low price-to-earnings (P/E) ratio of 10.43 and profit margins of almost 28% the company is on track to maintain that high payout.
If you’re like me, you’re highly anticipating the next few months because several high profile video games are coming out. Many have “Battle Royale” modes driven by PUBG and Fortnite, a major blockbuster video game.
While analysts have cautioned against buying video game company stocks because of competition, how about a retailer that sells all the video games. Gamestop Corp. (NYSE: GME) has a 10.35% dividend yield and a forward P/E of only 5.22.
With the upcoming launch of several new products the video game retailer stands to have a great upcoming holiday season. With a book value of $20.61 per share, the stock is trading at a discount of only $16.61. The 9% dividend yield is a great cushion, as well as a nice reward for patient investors waiting for the stock to move higher.
This mix of unconventional stocks should give you plenty to consider when looking for your next dividend play. CHS, PennyMac, GasLog, and Gamestop all offer a great yield, and the financial firepower to back it up.
Disclaimer: The author and Spotlight Growth has no positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.
Article By: Steven Adams