6 undervalued small caps with high dividend yields

High yield stocks could be a safer bet if market volatility increases.

| More on:

As we enter what is often referred to as “confession season” – the period leading up to August reporting season when companies are obligated to inform the market if their results will be out of line with expectations – investors are already getting a taste of things to come with a number of companies including Reject Shop Ltd (ASX: TRS) hosing down earnings guidance.

The weak economic growth being experienced by many companies just reinforces how important high yielding, dividend-paying stocks can be to a portfolio. Luckily there are still a number of opportunities out there for investors to secure high yields.

1)      Bradken Limited (ASX: BKN) is forecast to pay dividends in financial year (FY) 2015 totalling 27.7 cents per share (cps) according to Morningstar research. This implies the stock is trading on a forecast fully franked dividend yield of 7.9%.

2)      McPherson’s Ltd (ASX: MCP) is forecast to pay fully franked dividends totalling 12.5 cps in FY 2015, implying a huge yield of 11.1%.

3)      Wotif.com Holdings Limited (ASX: WTF) is forecast to pay dividends of 19.5 cps in FY 2015. Based on that forecast the stock is trading on a forecast fully franked dividend yield of 7.8%.

4)      MaxiTANS Industries Limited (ASX: MXI) is forecast to pay dividends totalling 7.8 cps in FY 2015. At the current share price, this equates to a forecast fully franked yield of 8.7%.

5)      WDS Limited (ASX: WDS) is forecast to grow its dividend from 7 cps in FY 2014 to 8 cps in FY 2015. If it manages to achieve this, then the stock is trading on a forecast yield of 8.3%.

6)      Countplus Ltd (ASX: CUP) is forecast to maintain a steady dividend of 12 cps from FY 2013 through FY 2015. This forecast implies a dividend yield of 6.8%.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

More on ⏸️ Investing