Today I’m looking at four FTSE SmallCap (INDEXFTSE: SMX) darlings poised to deliver stunning income flows.
I reckon investors should take advantage of heavy share price weakness at Communisis (LSE: CMS) and pile into the marketing services play.
Communisis boasts an enviable client list featuring the likes of Barclays, Centrica and Legal & General, and is steadily expanding its global footprint to keep business renewals and new contract wins from major blue chips flowing in.
With earnings tipped to keep rising, and Communisis generating shedloads of cash — free cash flow doubled in 2015 — the City has pencilled-in dividends of 2.4p and 2.5p for 2016 and 2017.
Consequently Communisis sports giant yields of 5.8% and 6.2% for these years.
Despite current market difficulties, I believe that TT Electronics (LSE: TTG) is also a sound pick for dividend chasers as its transformation strategy clicks through the gears.
The electronics specialists has seen business pick up in recent months, with revenues 4% higher during January-April on a constant currency basis. And the December acquisition of Aero Stanrew provides plenty of reasons to be cheerful — TT Electronics said that integration of the electromagnetic component specialist “has progressed well.“
The number crunchers expect dividends to turn higher again from 2016, resulting in a reward of 5.6p per share. This figure yields an impressive 4.5%.
And further earnings growth next year is expected to propel TT Electronics’ dividend to 5.8p, yielding 4.6%.
Dividends driving higher
With demand for new vehicles continuing to explode, I reckon shareholder payouts at financing specialists S&U (LSE: SUS) should keep pounding higher.
The company has seen motor finance transactions at its Advantage Finance division accelerate in recent months, and its customer base registered at an impressive 35,600 as of mid-May, up 3,000 from the end of 2015.
And helped by a robust UK economy, I expect earnings at S&U to rev higher from this year onwards, a promising omen for dividend seekers.
This view is shared by the City, and S&U is anticipated to pay dividends of 89.8p and 106.8p per share for the years to January 2017 and 2018, respectively. The finance play subsequently sports juicy yields of 3.9% for 2017 and 4.6% for the next year.
I believe newspaper and magazine distributor Connect Group (LSE: CNCT) is also in great shape to deliver solid returns.
The company — formerly known as Smiths News — is gearing up to embrace the fast-growing online retail segment, and Connect is now a major ‘click and collect’ service provider for heavyweights such as Amazon and ASOS.
On top of this, a five-year contract extension inked last month with publishing giant Northern & Shell provides Connect’s outlook in its traditional markets with a welcome shot in the arm.
Boosted by its solid earnings picture, the company is expected to fork out dividends of 9.5p and 9.9p per share in the years to August 2016 and 2017. These figures create exceptional yields of 5.9% and 6.2%.