Today I’m looking at four FTSE SmallCap (INDEXFTSE: SMX) income stars.
I reckon support services play Cape’s (LSE: CIU) exposure to a broad range of industries should allow it to keep revenues moving skywards. And although the energy and mining industries remain in peril, investors should take heart from the firm’s chunky £862m order book as of March.
The City expects Cape to maintain the dividend at 14p per share in both 2016 and 2017, figures that yield a splendid 7.1%. And dividend cover of 1.8 times for these years is pretty robust, even if it falls just short of the safety benchmark of 2 times.
I also believe SThree’s (LSE: STHR) terrific sector and geographic diversification make it a terrific bet for those seeking reliable earnings — and consequently dividend — growth in the years ahead. And the recruitment specialist is undertaking shrewd restructuring to mitigate weakness in key segments such as the oil and gas markets.
SThree is expected to pay a dividend of 14.1p per share for the year to November 2016, up from 14p last year and yielding a decent 5.8%. And this figures moves to 5.9% next year thanks to a predicted 14.4p reward.
Dividend coverage stands at 1.5 times through to the close of next year.
I’m backing the impressive international footprint of Communisis (LSE: CMS) to help it avoid the worst that Brexit kicks up. The company currently operates in almost 30 global territories, and is expanding its presence in order to keep winning business with major blue chips — it counts AXA, Barclays and BT Group among its clients.
The marketing play has a long history of hiking the dividend, and is predicted to raise it to 2.4p per share this year, up from 2.2p in 2015 and yielding 6.6%. And next year’s anticipated payout of 2.5p pushes the yield to 6.9%.
Meanwhile, dividend cover of 2.6 times and 2.5 times for 2016 and 2017 respectively should satisfy even the most cautious of investors.
Make healthy returns
I believe healthcare facility provider Primary Health Properties (LSE: PHP) is a great long-term pick for investors. Not only should government investment in primary care keep boosting PHP, but bubbly acquisition activity should also help to drive the bottom line.
Primary Health Properties’ dividend is predicted to rise from 4.91p per share last year to 5.1p and 5.3p in 2016 and 2017, yielding a splendid 4.7% and 4.9% respectively.
It’s true that dividend coverage for the period is poor — payouts are covered just 1 times by estimated earnings for 2016 and 1.1 times for next year. But I reckon the firm’s defensive operations and solid balance sheet should soothe the nerves.
Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.
Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.
The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.
But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.
Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.