The 100 Best Small Capitalized Dividend Growth Stocks to Invest in

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Nov 22, 2012
Everybody loves growth. If you own an investment and it starts to grow by double-digit rates over a few years, and the stock price explodes, you feel like a bird in heaven. I felt like this a few times. But it is also necessary that you sell partly your position over time. I personally reduce my stock positions when they have doubled or more. Certainly you can’t get very rich with this rule but you hedge your stock gains and believe me, by selling stocks with gains, nobody becomes poor.

I recently viewed a nice list at Forbes. The list was a research result of the 100 best small cap growth stocks in America. Stocks from the table are public and tradeable in America. They all have a total sales volume below the $1 billion mark and fantastic years of recent growth. As you can see on the list, the GDP growth in America is still weak but out there are still investment opportunities to discover.

I discovered the 10 best dividend stocks from the small cap growth picks. I needed to screen more than 50 companies in order to find 10 stocks with positive dividend payments. As you can see, most of the small cap growth stocks don’t pay dividends. But the debt situation is very comfortable. Most of them are free of debt and have bigger cash amounts to their balance sheets in order to finance future growth. The average stock grew in sales by 19 percent yearly. Earnings followed by 31 percent growth yearly and the average return on equity amounted to 20 percent.



Here are the best yielding dividend stocks:

Strayer Education (STRA, Financial) has a market capitalization of $561.72 million. The company employs 2,140 people, generates revenue of $627.43 million and has a net income of $106.04 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $200.67 million. The EBITDA margin is 31.98 percent (the operating margin is 28.55 percent and the net profit margin is 16.9 percent).

Financial Analysis: The total debt represents 50.84 percent of the company’s assets and the total debt in relation to the equity amounts to 277.82 percent. Due to the financial situation, a return on equity of 97.16 percent was realized. Twelve trailing months earnings per share reached a value of $6.60. Last fiscal year, the company paid $4 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: the P/E ratio is 7.17, the P/S ratio is 0.9 and the P/B ratio is finally 13.19. The dividend yield amounts to 8.45 percent and the beta ratio has a value of 0.73.

Quality Systems (QSII, Financial) has a market capitalization of $1.08 billion. The company employs 1,908 people, generates revenue of $429.84 million and has a net income of $75.66 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $134.15 million. The EBITDA margin is 31.21 percent (the operating margin is 27.03 percent and the net profit margin 17.6 percent).

Financial Analysis: The total debt represents zero percent of the company’s assets and the total debt in relation to the equity amounts to zero percent. Due to its financial situation, a return on equity of 29.11 percent was realized. Twelve trailing months earnings per share reached a value of $1.14. Last fiscal year, the company paid $0.70 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: the P/E ratio is 15.94, the P/S ratio is 2.5 and the P/B ratio is finally 3.63. The dividend yield amounts to 3.86 percent and the beta ratio has a value of 0.7.

FutureFuel (FF, Financial) has a market capitalization of $485.17 million. The company employs 500 people, generates revenue of $309.88 million and has a net income of $34.51 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $60.81 million. The EBITDA margin is 19.62 percent (the operating margin is 16.66 percent and the net profit margin 11.14 percent).

Financial Analysis: The total debt represents zero percent of the company’s assets and the total debt in relation to the equity amounts to zero percent. Due to the financial situation, a return on equity of 12.77 percent was realized. Twelve trailing months earnings per share reached a value of $0.93. Last fiscal year, the company paid $0.30 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: the P/E ratio is 12.56, the P/S ratio is 1.57 and the P/B ratio is finally 1.68. The dividend yield amounts to 3.41 percent and the beta ratio has a value of 0.54.

Take a closer look at the full table of the 10 best yielding small cap growth stocks. The average P/E ratio amounts to 22.64 and forward P/E ratio is 17.02. The dividend yield has a value of 2.68 percent. Price to book ratio is 5.03 and price to sales ratio 4.42. The operating margin amounts to 29.98 percent. The average stock has a debt to equity ratio of 0.17.