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18 high-yield small-cap plays

18 high-yield small-cap plays

Smaller companies are not normally the first port of call for income hunters – that’s if they’re a port of call at all. A key reason the potential of smaller companies as dividend payers is often overlooked is that their businesses tend to be less robust than those of their larger peers. This increases the likelihood of dividend cuts when times get tough. Another factor is that income is not of primary importance for many smaller company investors. Often the allure of dabbling in small cap stocks is based on the potential to find tomorrows giants while they’re still minnows. Companies that fit this bill should be able to make far more lucrative use of their cash by investing in growth rather than handing it back to shareholders as dividends.

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