Kurtis Hemmerling submits:
Most people think of giant value companies with reduced growth and high cash-flow as being the typical blue chip dividend paying stock. But tiny stocks can also deliver high yielding income payouts. The benefit of picking small cap companies with large dividends is the added exposure to capital gains in addition to the income strategy.
The small cap effect is highlighted in the Fama and French paper, Value Versus Growth: The International Evidence (1997). This team of researchers have provided empirical data that show smaller cap companies (both value and growth) as historically outperforming larger cap stocks.
Our stock scan will try to give income investors a healthy capital gain potential to compliment their dividends. Our criteria is as follows:
* Price under $10
* Small cap or below 2 billion market capitalization
* Dividend yield above 5%
* Price to Free Cash Flow under 30
* Price went up over the past 3 months
