I’m always on the lookout for interesting dividend stocks, since I enjoy a side of income to go with my growth. Today, we have two small-cap stocks to check out. Let’s start with the smaller of the two dividend players.
Ten Peaks Coffee Co. Inc. (TSX:TPK)
Ten Peaks is a baby stock in terms of market capitalization, sitting at $57.49 million. As the name suggests, this is a coffee company, specializing in green coffee and green coffee decaffeination. I assumed you’d be like me and have no idea what that means, so I’ve looked it up for you. It’s a process of soaking coffee beans in a caffeine-free coffee extract. It’s a way of decaffeinating coffee that apparently retains all the flavour of caffeinated coffee.
How does the stock look? It has a P/E ratio of only 10.82, so the earnings of this company aren’t expensive. Its net profit margin only sits at 5.06%, but that looks good when compared to many other Canadian beverage makers. Earnings per share currently sit at $0.56.
For a little company, the stock offers a nice dividend. Ten Peaks has offered a steady quarterly dividend of $0.0625 per share over the last five years. That turns into $0.25 per year for a nice yield of 3.97%.
Student Transportation provides school transportation and management services in Canada and the U.S. to public and private schools. This is another small-cap stock, sitting at $704 million.
How does this one look? It’s got a far higher P/E ratio of 63.27, so these earnings are not cheap. Its net profit margin is 1.01%, lower than most of its peers. Earnings per share sit at $0.12 — also below most of its peers.
Where this stock shines is in its dividend offering. It currently pays a “monthly” dividend (11 times per year) of U.S.$0.0367 for an annual payout of U.S.$0.40. This payout has held steady since 2015 and translates to a huge yield of 7.24%.
Both stocks offer nice dividends. STB has a higher yield, but it has a higher earnings price and lower profit margin than Ten Peaks. You will have to decide which is the better option for you if you aren’t interested in both.