3 Small-Cap Stocks With Yields up to 9%

Interested in small-cap dividend stocks? If so, Bonterra Energy Corp. (TSX:BNE), Morneau Shepell Inc. (TSX:MSI), and Milestone Apartments Real Estate Invt Tr (TSX:MST.UN) are three of the best.

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As wise investors know, dividend-paying stocks outperform non-dividend-paying stocks over the long term, and small-cap stocks have the highest growth rates on average. Investing in a dividend-paying, small-cap stock can be a recipe for huge returns, so let’s take a look at three with yields up to 9% that you could buy right now.

1. Bonterra Energy Corp.: 9% yield

Bonterra Energy Corp. (TSX:BNE) is one of the leading producers of oil and natural gas in Canada. It pays a monthly dividend of $0.15 per share, or $1.80 per share annually, giving its stock a 9% yield at today’s levels. It is also very important to note that the company reduced its dividend by 50% in January in order to maintain its financial stability in the low commodity price environment, and I think the new rate is sustainable for the long term.

2. Morneau Shepell Inc.: 5.1% yield

Morneau Shepell Inc. (TSX:MSI) is the largest provider of human resources consulting and outsourcing services in Canada. It pays a monthly dividend of $0.065 per share, or $0.78 per share annually, which gives its stock a 5.1% yield at current levels. Investors should also note that the company has maintained this monthly rate since January 2011, but its increased amount of free cash flow, including 9% year-over-year growth to $30.23 million in the first half of fiscal 2015, could allow for a slight increase in the second half.

3. Milestone Apartments Real Estate Invt Tr: 4.4% yield

Milestone Apartments Real Estate Invt Tr (TSX:MST.UN) is one of the largest multi-family residential landlords in the United States. It pays a monthly distribution of $0.05417 per share, or $0.65 per share annually, giving its stock a 4.4% yield at today’s levels. It is also worth noting that Milestone has maintained this monthly rate since April 2013, its first full month as a public company, but its increased amount of funds from operations, including 32.2% year-over-year growth to $29.14 million in the first half of fiscal 2015, could allow for a significant increase in the very near future.

Should you increase your portfolio’s yield?

Bonterra Energy, Morneau Shepell, and Milestone Apartments are three of the top dividend-paying, small-cap investment options in the market today. Foolish investors should take a closer look and consider buying one of them.

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. Milestone Apartments Real Estate Invt Tr is a recommendation of Stock Advisor Canada.

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