These 3 dividend-paying small-caps are on sale! I’d buy them for my ISA today

Forget about the blue-chips for a moment. Royston Wild discusses a few small-caps with heroic dividends that he thinks could help you get rich.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Investors looking to grab big value and some chunky dividends need to pay Trifast (LSE: TRI) close attention. You might not have heard of the small-cap before, but its products are essential in keeping the world turning. It provides screws, bolts and other sorts of fastenings essential in the production lines of the automotive, electronics and domestic appliance industries.

Trifast generates the lion’s share of its profits from Europe and Asia, and it has a wide global footprint to effectively service the needs of its customers. Indeed, it makes a point of working closely with each of its clients to build bespoke fastening solutions and has set up hubs close to original equipment solutions (OEMs) for this very purpose.

Today, Trifast packs an undemanding forward price-to-earnings (P/E) ratio of 14 times. It also packs a chunky 3.9% corresponding dividend yield too. Profits are likely to come under pressure as the global economy enters a period of slowdown. Still, this is a small-cap that’s too good to miss at current prices. I’d happily buy it for my own ISA right now.

The letters ISA (Individual Savings Account) on dice on stacks of gold coins on a white background.

The 5.5%-yielding small-cap

Devro is another small-cap that’s exceptionally cheap, given its bright long-term growth picture. I’m particularly encouraged by the tremendous sales potential in its Asia Pacific territory, a region in which it’s invested heavily in its sales and manufacturing processes over the past decade.

The sausage casings maker stands to gain from exploding meat consumption on the continent in the coming decades. A report from consultancy Asia Research & Engagement suggests that, thanks to “growing wealth and urbanisation rates,” meat and seafood consumption in Asia Pacific will balloon by 33% by 2030, and by a stunning 78% by the middle of the century.

Today, Devro trades on a forward P/E ratio of 11 times. It carries a mighty dividend yield of around 5.5% too. I reckon it’s worthy of serious attention from value chasers.

Farming star

Rising population levels along with those increasing personal incomes bode well for Devro. And the same can be said for Carr’s Group, a manufacturer of animal feed in Europe and the US. It provides other agricultural services to help farmers put food to plates.

Carr’s Group has been investing heavily in its engineering division in recent years too. It offers product for a variety of industries, but it’s the field of nuclear decommissioning and defence in which it offers plenty of profits opportunity over the next decade and beyond. One of the biggest steps it’s made in this area is the acquisition of NW Total Engineered Solutions last year for just under £10m.

The small-cap trades on a forward earnings multiple of just 10 times right now. A 4.3% dividend yield also offers lots for income investors to get excited about. I reckon this is another brilliant small-cap to snap up today.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Devro. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Penny stocks to consider buying while their prices are this cheap

Some of the penny stocks I've been watching have already climbed above the 100p level. But I see potential in…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Revealed! One of the hottest growth, value, and dividend shares to buy today

This high-dividend, low-cost company is also one of the London stock market's most exciting growth shares, writes Royston Wild.

Read more »

Investing Articles

£20,000 in savings? Here’s how I’d target a £2,219 monthly passive income with FTSE 100 shares

Investing in FTSE 100 shares can be a great way to turn a regular investment into a life-changing passive income…

Read more »

Investing Articles

These are the most popular 2024 Stocks and Shares ISA picks so far

After a few tough years, it looks like the 2024 Stocks and Shares ISA season is getting off to a…

Read more »

Investing Articles

This FTSE 100 ETF may be the simplest way to become a stock market millionaire

Ben McPoland considers one very straightforward stock market investing strategy that could lead to a million-pound portfolio.

Read more »

Investing Articles

I’d buy 11,220 Legal & General shares for £200 a month in passive income

Our writer considers how much money investors would have to put into Legal & General (LON:LGEN) shares to target £2,400…

Read more »

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Investing Articles

These 2 magnificent FTSE 250 shares are on sale right now!

These FTSE 250 companies still look cheap, despite recent share price gains. Here's why our writer Royston Wild thinks they’re…

Read more »

Blue NIO sports car in Oslo showroom
Growth Shares

Down 36% in 2024, how low could NIO shares go?

The electric vehicle sector has seen some tremendous volatility in recent years, but what does the future hold for NIO…

Read more »