One of the most important facts to know about investing is that dividend-paying stocks far outperform non-dividend-paying stocks over the long term. This means that all long-term investors should own at least one dividend-paying stock, and depending on your age, investment goals, and risk tolerance, maybe a diversified portfolio full of them. With this in mind, let’s take a look at three small-cap stocks with yields of up to 6.05% that you could buy today.
1. Russel Metals Inc.: 6.05% yield
Russel Metals Inc. (TSX:RUS) is one of the largest metals distribution companies in North America. It pays a quarterly dividend of $0.38 per share, or $1.52 per share annually, giving its stock a 6.05% yield at today’s levels. The company has also increased its dividend four times since 2011, and its ample free cash flow generation could allow for another increase in the very near future.
2. Superior Plus Corp.: 5.3% yield
Superior Plus Corp. (TSX:SPB) is a diversified business corporation, with operations in the energy, specialty chemicals, and construction industries. It pays a monthly dividend of $0.06 per share, or $0.72 per share annually, which gives its stock a 5.3% yield at current levels. It is also worth noting that the company increased its dividend by 20% in October 2014 as a result of its strong operational performance, and I think this could become an ongoing theme over the next several years.
3. Reitmans (Canada) Limited: 3% yield
Reitmans (Canada) Limited (TSX:RET.A) is one of Canada’s largest retailers of women’s apparel and accessories. It pays a quarterly dividend of $0.05 per share, or $0.20 per share annually, giving its stock a 3% yield at today’s levels. Investors should also note that the company reduced its dividend by 75% in January 2014 as a result of disappointing sales and earnings results, but I think the current rate is sustainable for the long term.
Which of these small-cap stocks should you buy today?
Russel Metals, Superior Plus, and Reitmans are three of the top small-cap dividend-paying stocks in the market today. All long-term investors should strongly consider beginning to scale in to positions in at least one of them.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joseph Solitro has no position in any stocks mentioned.