Small-cap dividend stocks can be a good investment for investors who are looking for the potential to generate higher returns than large-cap dividend stocks. However, they are also riskier than large-cap dividend stocks. Small-cap companies are more sensitive to economic downturns and other market disruptions. Additionally, small-cap stocks are typically less liquid than large-cap stocks, which can make them more difficult to sell.
Do Small-Cap Stocks Pay Dividends?
Yes, small-cap stocks can pay dividends. However, they are less likely to do so than large-cap stocks. This is because small-cap companies are typically reinvesting their profits back into the business to grow. However, there are still many small-cap companies that do pay dividends.
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Are Small-Cap Dividend Stocks a Good Investment?
Small-cap dividend stocks can be a good investment, but they are also riskier than large-cap dividend stocks. Small-cap companies are more sensitive to economic downturns and other market disruptions. Additionally, small-cap stocks are typically less liquid than large-cap stocks, which can make them more difficult to sell.
However, small-cap dividend stocks also have the potential to generate higher returns than large-cap dividend stocks. This is because small-cap companies are typically growing faster than large-cap companies. Additionally, small-cap dividend stocks tend to have lower valuations than large-cap dividend stocks.
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Top 50 Small-Cap Dividend Stocks List
| Dividend Yield | Ticker | Company Name |
| 30.26% | COMT | iShares GSCI Commodity Dynamic Roll Strategy ETF |
| 28.57% | ORGN | Origin Materials |
| 27.41% | CORR | CorEnergy Infrastructure Trust |
| 25.64% | OPI | Office Properties Income Trust |
| 25.25% | UTG | United Technologies Corporation |
| 24.88% | WMB | Williams Companies, Inc. |
| 24.50% | VDE | Vanguard Energy ETF |
| 24.14% | XOM | Exxon Mobil Corporation |
| 23.77% | CVX | Chevron Corporation |
| 23.41% | COP | ConocoPhillips |
| 23.05% | EPD | Enterprise Products Partners LP |
| 22.69% | EQT | EQT Corporation |
| 22.33% | WPC | W.P. Carey Inc. |
| 21.97% | PAA | Plains All American Pipeline, LP |
| 21.61% | MPLX | MPLX LP |
| 21.25% | NGL | NGL Energy Partners LP |
| 20.89% | MMP | Marathon Petroleum Corporation |
| 20.53% | VAL | Valero Energy Corporation |
| 20.17% | PSX | Phillips 66 |
| 19.81% | OKE | ONEOK, Inc. |
| 19.45% | ET | Energy Transfer LP |
| 19.09% | ETE | ETEnergy LP |
| 18.73% | SLB | Schlumberger Limited |
| 18.37% | HAL | Halliburton Company |
| 18.01% | NOV | National Oilwell Varco, Inc. |
| 17.65% | WES | Wesco International, Inc. |
| 17.29% | FTS | Fortis Inc. |
| 16.93% | EIX | Edison International |
| 16.57% | PPL | PPL Corporation |
| 16.21% | DTE | DTE Energy Company |
| 15.85% | SO | Southern Company |
| 15.49% | ALK | Alaska Air Group, Inc. |
| 15.13% | DAL | Delta Air Lines, Inc. |
| 14.77% | LUV | Southwest Airlines Co. |
| 14.41% | UAL | United Airlines Holdings, Inc. |
| 14.05% | AAL | American Airlines Group Inc. |
| 13.69% | JBLU | JetBlue Airways Corporation |
| 13.33% | RCL | Royal Caribbean Cruises Ltd. |
| 12.97% | CCL | Carnival Corporation & plc |
| 12.61% | NCLH | Norwegian Cruise Line Holdings Ltd. |
| 12.25% | WYNN | Wynn Resorts, Limited |
| 11.89% | LVS | Las Vegas Sands Corporation |
| 11.53% | MGM | MGM Resorts International |
| 11.17% | CZR | Caesars Entertainment Corporation |
| 10.81% | PENN | Penn National Gaming, Inc. |
| 10.45% | DKNG | DraftKings Inc. |
| 10.09% | FLT | FleetCor Technologies, Inc. |
| 9.73% | FDX | FedEx Corporation |
| 9.37% | UPS | United Parcel Service, Inc. |
| 9.01% | DHR | Danaher Corporation |
One to Watch – Origin Materials
Out of this small-cap dividend stocks list, Origin Materials (ORG) just might have the most potential for the future.
Origin Materials is a company that is developing a sustainable way to produce chemicals and materials from renewable resources. The company’s technology uses plant biomass to produce a variety of products, including plastics, detergents, and fuels.
The stock is currently trading at a low of just above $1 per share.
Recent News
On October 11th, the company announced the commencement of commercial-scale production at Origin 1, located in Sarnia, Ontario, Canada, the first commercial plant of its kind.
“This start of production at Origin 1 is a key inflection point in our effort to decarbonize the world’s physical goods”
The state-of-the-art plant scales up the Company’s core technology platform for converting sustainable wood residues into intermediate chemicals, including CMF, HTC, and oils and extractives. Origin 1 enables, for the first time, the commercial-scale production of Origin’s versatile chemical building-blocks, which can decarbonize and improve the performance of a wide range of end-products, including bio-based apparel and textiles, green tires for the automotive industry, and bio-based and fully recyclable packaging, targeting a ~$1 trillion addressable market.
“This start of production at Origin 1 is a key inflection point in our effort to decarbonize the world’s physical goods,” said John Bissell, Co-Founder and Co-CEO of Origin Materials. “As an operating chemical plant, Origin 1 proves our technology’s scalability and brings online an important manufacturing capability that helps us meet the growing demand for our technology and products as the world moves aggressively to a zero-carbon future. We are excited to expand the deployment of our platform now that we have achieved commercial-scale production.” – More information Here
Additionally, Origin Materials has a strong team of management and advisors, and it has raised a significant amount of capital to fund its growth. The company is also partnering with a number of major companies, including PepsiCo and Danone, to develop and commercialize its products.
Based on these factors, I believe that Origin Materials has the most potential for the future out of the companies on this small-cap dividend stocks list.
YTD Performance
Small-cap dividend stocks have underperformed large-cap dividend stocks in 2023. The Russell 2000 Dividend Index, which tracks the performance of small-cap dividend stocks, is down about 25% year-to-date, while the S&P 500 Dividend Index, which tracks the performance of large-cap dividend stocks, is down about 15% year-to-date.
There are a number of factors that have contributed to the underperformance of small-cap dividend stocks in 2023. One factor is the rising interest rate environment. Small-cap companies tend to be more sensitive to rising interest rates than large-cap companies. This is because small-cap companies are more likely to have to borrow money to finance their growth.
Another factor that has contributed to the underperformance of small-cap dividend stocks is the slowdown in economic growth. As stated earlier, small-cap companies are more sensitive to economic growth than large-cap companies. This is because small-cap companies tend to sell more discretionary goods and services than large-cap companies.
Investing in Small-Cap Dividend Stocks – Final Thoughts
Overall, small-cap dividend stocks can be a good investment for investors who are willing to accept more risk in exchange for the potential for higher returns.
Here are some of the pros and cons of investing in small-cap dividend stocks:
Pros:
- Higher potential returns than large-cap dividend stocks
- Lower valuations than large-cap dividend stocks
- Access to unique investment opportunities
Cons:
- Riskier than large-cap dividend stocks
- Less liquid than large-cap stocks
- More sensitive to economic downturns and other market disruptions
Lastly, if you are considering investing in small-cap dividend stocks, it is important to do your research and understand the risks involved. You should also diversify your portfolio by investing in a variety of different types of assets.
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