10 Best Small Cap Dividend Stocks With Safe Payouts

There’s a big chance that income investors are happy with their investments in at least one of the 10 best small cap dividend stocks with safe payouts.

Several hedge funds that Insider Monkey tracks became upbeat about small-cap companies’ stocks during the second quarter based on their recent wave of 13F filings. Over the next few pages, we have analyzed the best small-cap dividend stocks to invest in based on that hedge fund sentiment. That’s what we do at Insider Monkey and our flagship strategy has returned 44.2% since February 2016 vs. a 29.6% gain for the S&P 500 index ETF (SPY). Our most recent stock picks, which were disclosed to our subscribers in the middle of February, beat the market by 5 percentage points in the three months that followed and our latest picks were released in the middle of May. Our system is easy for investors to implement, with just a small batch of trades to be executed once per quarter.

For this list of the best small cap dividend stocks with safe payouts, the companies are ranked according to hedge fund ownership. We have also provided additional information about the stocks’ annual dividend payouts and share prices as of July 14, 2017, as well as their dividend yields and payout ratios. For the purposes of this list, we have sought out small-cap companies with dividend yields of at least 3%, five-year growth rates of at least 10% annually, and payout ratios of less than 55%. That way, we can be sure that the companies included in this list are good investments with high dividend yields, payout ratios that are low enough to be sustainable, and stock growth rates that have been stellar over the past five years.

Head to the next page to begin the list of the 10 best small cap dividend stocks with safe payouts. Insider Monkey also has a list of the 10 best energy dividend stocks for income investors, for those of you who prefer to pick stocks focused on the energy industry.

10. Ituran Location and Control Ltd. (US) (NASDAQ:ITRN)

Annualized five year stock growth rate for Ituran Location and Control Ltd. (US) (NASDAQ:ITRN): 16.4%

Annual dividend: $0.96

Stock price: $31.50

Dividend yield: 3.05%

Payout ratio: 47.3%

Hedge fund sentiment: 5 hedge funds with $41.3 million in investments

9. HCI Group Inc (NYSE:HCI)

Annualized five year stock growth rate for HCI Group Inc (NYSE:HCI): 39.5%

Annual dividend: $1.40

Stock price: $46.01

Dividend yield: 3.04%

Payout ratio: 37%

Hedge fund sentiment: 10 hedge funds with $15.3 million in investments

8. Summit Hotel Properties Inc (NYSE:INN)

Annualized five year stock growth rate for Summit Hotel Properties Inc (NYSE:INN): 14.1%

Annual dividend: $0.68

Stock price: $18.08

Dividend yield: 3.76%

Payout ratio: 51.5%

Hedge fund sentiment: 10 hedge funds with $20.2 million in investments

7. Aircastle Limited (NYSE:AYR)

Annualized five year stock growth rate for Aircastle Limited (NYSE:AYR): 10.3%

Annual dividend: $1.04

Stock price: $21.67

Dividend yield: 4.80%

Payout ratio: 46.2%

Hedge fund sentiment: 10 hedge funds with $105.1 million in investments

The next six companies on this list of the 10 best small cap dividend stocks with safe payouts each have more than 10 hedge fund backers.

6. Knoll Inc (NYSE:KNL)

Annualized five year stock growth rate for Knoll Inc (NYSE:KNL): 10.8%

Annual dividend: $0.60

Stock price: $19.34

Dividend yield: 3.10%

Payout ratio: 35.9%

Hedge fund sentiment: 11 hedge funds with $46.3 million in investments

5. Maiden Holdings, Ltd. (NASDAQ:MHLD)

Annualized five year stock growth rate for Maiden Holdings, Ltd. (NASDAQ:MHLD): 14%

Annual dividend: $20.60

Stock price: $10.95

Dividend yield: 5.48%

Payout ratio: 48%

Hedge fund sentiment: 12 hedge funds with $31.5 million in investments

4. Sturm Ruger & Company Inc (NYSE:RGR)

Annualized five year stock growth rate for Sturm Ruger & Company Inc (NYSE:RGR): 32.1%

Annual dividend: $1.92

Stock price: $60.30

Dividend yield: 3.18%

Payout ratio: 43.9%

Hedge fund sentiment: 12 hedge funds with $52.5 million in investments

3. Schweitzer-Mauduit International, Inc. (NYSE:SWM)

Annualized five year stock growth rate for Schweitzer-Mauduit International, Inc. (NYSE:SWM):

Annual dividend: $2.32

Stock price: $47.28

Dividend yield: 4.91%

Payout ratio: 46.2%

Hedge fund sentiment: 13 hedge funds with $52.4 million in investments

2. Brinker International, Inc. (NYSE:EAT)

Annualized five year stock growth rate for Brinker International, Inc. (NYSE:EAT): 17.1%

Annual dividend: $1.36

Stock price: $36.83

Dividend yield: 3.69%

Payout ratio: 43.2%

Hedge fund sentiment: 20 hedge funds with $111.8 million in investments

1. Finish Line Inc (NASDAQ:FINL)

Annualized five year stock growth rate for Finish Line Inc (NASDAQ:FINL): 14.9%

Annual dividend: $0.44

Stock price: $14.04

Dividend yield: 3.13%

Payout ratio: 38.6%

Hedge fund sentiment: 21 hedge funds with $60.9 million in investments

The stellar five-year dividend returns for Finish Line puts the small-cap company on top of this list of the 10 best small cap dividend stocks with safe payouts.

Disclosure: None