6 undervalued small caps with high dividend yields

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

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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%.

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

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »