When it comes to dividends, investors are often drawn to larger companies believing that their dividends are more secure. Unfortunately this is not always the case with even the bluest of blue chip companies at times forced to cut distributions. Recent examples being Woolworths Limited (ASX: WOW) and Australia and New Zealand Banking Group (ASX: ANZ).

Personally, I like to hold a range of companies both large and small in my dividend portfolio. When investing for dividends no matter what size the company is, three key factors need to be met: reliability, sustainability and growth.

Below are three small companies all paying healthy dividends which I suggest every dividend investor should take the time to investigate.

Money3 Corporation Limited (ASX: MNY)

Money3 is a licensed credit provider of short term loans and financial services. They specialise in the delivery of small unsecured personal loans, along with secured automotive loans and instant cheque cashing. Money3 has branches throughout Victoria, New South Wales, South Australia, Queensland and Tasmania.

mny1Source: Money3 Company presentation

Over the last 18 months, Money3’s share price has fallen over 30% primarily on the back of proposed changes to regulations surrounding small loans. Despite the share price fall, Money3 has continued to post increasing profits and dividends. With regulatory uncertainty now clearing, it is the perfect time for dividend investors to start researching this company.

Data#3 Limited (ASX: DTL)

Data3 is a technological company providing software solutions in the areas of cloud computing, mobility, IT lifecycle management, security, data analytics, business consulting and industry solutions. Data3 is currently changing its direction to capture more revenue from the cloud and services sector. Its latest results indicate this change appears to be on track. With zero borrowings on its balance sheet, investors should keep an eye on this company.

DTL1

Source: Data3 company presentation

Lindsay Australia Limited (ASX: LAU)

Most investors will be aware of Lyndsay having spotted their delivery trucks out on the highways across Australia.  What investors might not know is that Lindsay is listed on the ASX and is another small company sporting a healthy dividend.

Lindsay Australia Limited is an integrated transport, logistics and rural supply company with an increasing emphasis on the transport and storage of fresh food. Lindsay operates primarily on the east coast of Australia and as such has so far avoided the slow down experienced by shipping companies in the west.

In my mind the competitive advantage for Lindsay is its unique relationship with its customers which it terms the “Lindsay” solution. The solution provides a full spectrum of services from the “paddock to port” and evokes strong loyalty.

LAU1

Source: Lindsay Company Presentation

 Foolish takeaway

When investing for dividends, I believe it is wise not to put all of your eggs in one basket. I prefer to manage risk by investing in a number of companies both big and small across a range of industries. In my opinion this is particularly important for self-funded retirees who rely on dividend income for their daily needs.

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Motley Fool contributor Alan Edmunds owns shares of Money3 Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.