Why Buy “Broke” Blue Chips? These 5 Small Caps Pay up to 17%

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Small-cap stocks haven’t been this cheap in decades. This valuation advantage gets interesting when we add big fat dividends and today, we’ll discuss five cheap small stocks yielding between 8.3% and 17.1%. (That’s no typo by the way—we only talk serious dividends here at Contrarian Outlook!)

The Apples, Google and Microsofts of the world are priced like luxury goods. Smaller stocks, meanwhile, have been left at the discount rack. Let’s shop:

  • S&P 500: 21.2 times earnings (pricey!)
  • S&P MidCap 400: 15.4 times (better…)
  • S&P SmallCap 600: 14.7 times (bingo!)

The valuation spread between the S&P 500 and S&P 600 hasn’t been this wide since Bill Clinton was wondering whether dot-com was one word or two.… Read more

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Which dividend is most likely to be hiked?

Usually, the brand-new payout.

Chief Financial Officers are a conservative bunch. A CFO will only agree to pay a dividend if they know they can:

  1. Make the payment comfortably.
  2. Hike the dividend repeatedly for years to come—with said comfort.

The hike part is important because rising dividends drive stock gains. I’m talking about hundreds or even thousands of percentage points in potential gains.

Let’s consider Apple (AAPL) and its inaugural dividend moment. In March 2012, the tech giant initiated a regular dividend of $2.65 per share. The payout was a catalyst for 12 subsequent years of moonshot performance.… Read more

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