Neenah Paper, Inc. (NP): There’s Plenty Of Upside Left In This Surging Small-Cap Stock

The company also recently increased its quarterly dividend to 20 cents a share from 15 cents, representing a 33% increase. This increase comes after a hike of 25% during the first quarter. With the increase, the company is now yielding about 2.1% annually.

Perhaps more exciting for investors, Neenah Paper, Inc. (NYSE:NP) has recently announced a $10 million stock repurchase program. It plans on buying back its stock over the next 52-week period. This plan replaces the previous plan in which the company purchased around $4 million of shares during the preceding 12 months. There is no set schedule for the buybacks, and the program may be discontinued at anytime. However, despite this caveat, with only slightly less than 16 million shares outstanding, this buyback has the potential of being a powerful upside catalyst.

Risks to Consider: Despite Neenah appearing very strong across multiple metrics, anything can happen in the financial markets. Always be certain to use stop-loss orders, diversification and position size based on your capital levels and investment goals.

Action to Take –> I love this stock on a breakout close above $39. However, a breakdown to the $37 level will also attract my buying interest. An initial stop level at $36 and a 12-month target price of $50 is a solid forecast.

P.S. — Stocks like Neenah Paper are similar to a special group of securities we call “Forever” stocks. These are companies that pay investors a fat dividend and buy back massive amounts of stock, boosting the value for the rest of the shares. They’re solid enough stocks to buy, forget about and hold “Forever.” To learn more about these stocks — including some of their names and ticker symbols — click here.