3 Small-Cap Stocks on the Rise With Over 4% Dividend Yields

December 04, 2024 at 07:15 AM EST

Counting large stack of cash notes — Photo

Small-cap stocks and dividends aren’t always synonymous. However, that’s not true for these three stocks. They have consistently provided income to their shareholders. Also, these companies' shares have risen strongly over the past three months, showing positive sentiment in the market.

Sinclair: +5% Dividend Yield in an Overlooked Part of the TV Industry

Sinclair (NASDAQ: SBGI) currently pays out quarterly dividends of $0.25 per share, bringing its dividend yield to 5.5%. Shares have experienced an impressive rise of 30% over the past three months. Sinclair operates in the local television and regional sports media industry. Sinclair is one of the largest producers of local news in the United States, operating in 86 markets. This includes three top-15 markets in Washington, D.C., Seattle, WA, and Minneapolis, MN.

This might sound like an industry in rapid decline, but Sinclair has actually been experiencing a resurgence. Revenue growth has been positive every quarter in 2024 and is accelerating. The 3% growth seen in Q1 increased to 20% in Q3. Broadcast TV has fared well compared to cable companies recently.

Streaming platforms are gaining TV viewers, mostly from cable. From Sept. 2023 to Sept. 2024, cable lost nearly 4% of its market share, while local broadcasting lost less than half a percent.

More sporting events are moving to broadcast TV, a key viewership driver. ABC added six NFL Monday Night Football games in 2024. Additionally, 12 major professional sports teams have reached broadcast deals with local networks. These are positive signs for the industry.

Deluxe: Steady-Eddy Dividend Payer Prioritizing Business Efficiency

Deluxe (NYSE: DLX) has paid a $0.30 per share dividend every quarter since at least 2017. That has given the stock a 5.2% dividend yield over the past 12 months. Shares have also exhibited considerable upside recently, up 14% in the last three months.

The company is in the payment processing business, with most of its customers being small and medium-sized firms. Its software and equipment allow companies to accept debit and credit cards and government benefits like food stamps. Its solutions decide whether to decline or approve a purchase by communicating with the bank or another institution. Its software integrates with merchant accounting software to allow for accurate financial reporting.

Interestingly, the company also generated revenue of over $700 million in 2023 from check printing. Despite the age of digitalization, this is clearly a service many still need; revenues from checks only declined by 2% last quarter. The company’s merchant services revenue grew by over 6%. Overall, the company’s comparable adjusted revenue dropped by less than 1%. It is driving efficiency in its business. Profits are up despite a drop in revenue.

Management aims to continue this, forecasting revenue to grow around 3% and aiming to increase its free cash flow substantially. This is a low-to-declining growth business that understands its situation. Still, analysts believe that it remains undervalued; the average Wall Street price target indicates a 34% upside in shares.

Silvercrest: Big Money Management and Big Dividends

Silvercrest Asset Management Group (NASDAQ: SAMG) has increased its quarterly dividend by 67% since 2017, paying $0.20 per share in the last two quarters. This brings its dividend yield up to 4.4%. Shares of the financials stock have also risen considerably by 15% over the past three months.

Silvercrest is in the ultra-high-net-worth and institutional money management industry. As of Q3, the firm has over $35 billion in assets under management, a 13% increase from the previous year's quarter. The company helps clients with all financial matters. This includes tax management, wealth planning, and investment management. It creates value for clients by picking investment funds and building its own stock portfolios.

Since its inception, every one of the firm’s proprietary stock portfolios has beaten its respective benchmark index. This is highly impressive, especially considering several of these portfolios go back to 2002.

This is one of the factors that has allowed the company to maintain an average client retention rate of 98% since 2006. Revenue growth hasn't been impressive at 2% to 4% in recent quarters, but this industry is set to continue growing. In 2023, the number of ultra-high-net-worth individuals worldwide increased by 5%.

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3 Small-Cap Stocks on the Rise With Over 4% Dividend Yields

Sinclair: +5% Dividend Yield in an Overlooked Part of the TV Industry

Deluxe: Steady-Eddy Dividend Payer Prioritizing Business Efficiency

Silvercrest: Big Money Management and Big Dividends

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