MENU

3 small caps with big dividends

Most of the shares with big dividend yields are ones that are large caps, don’t have much growth left and are priced quite cheaply accordingly.

Small caps don’t usually have a big dividend yield because they are re-investing for growth or simply not profitable yet.

However, there are a few small caps on the ASX that do have big dividend yields, like these:

Dicker Data Ltd (ASX: DDR)

Dicker Data is a hardware distributor wholesaler which has been operating for around 35 years.

If any business wants to succeed these days it needs to have good technology to help get the job done. Dicker Data is thriving in this space.

Dicker Data is currently trading with a grossed-up dividend yield of 8.96%.

WPP Aunz Ltd (ASX: WPP)

This locally listed business is a company bringing together dozens of advertising and media businesses together to best serve Australian business advertising needs.

It’s steadily growing its dividend and also a large grossed-up yield of 7.79%.

Retail Food Group Limited (ASX: RFG)

Retail Food Group is the master franchisor behind a number of businesses such as Gloria Jeans, Brumby’s, Crust Pizza, Cafe2U and Michel’s Patisserie.

The business manages to keep churning out growth in the underlying earnings per share and the dividend, which makes it an underrated dividend success story.

I don’t love the business but the dividend yield and growth is undeniable.

It’s currently trading with a grossed-up dividend yield of 9.44%.

Foolish takeaway

All three businesses have risks, which is why they’re trading cheaply. In the long-term I think Retail Food Group is the one most likely to generate the strongest total shareholder return because it’s growing overseas and that has a lot of potential.

I'd prefer to buy our number one dividend share for FY18 over the other three because it has good growth and dividend prospects.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool's dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader, but it's making waves in Asia and already boasts a term-deposit-crushing dividend above 4%. A debt free balance sheet and dominant market position at home and abroad mean this company offers investors income and some real-deal growth potential...

Simply click here to grab your FREE copy of this up-to-the-minute research report on this rising star right now.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Dicker Data Limited and Retail Food Group Limited. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.