3 Promising Small-Cap Value Stocks With Hefty Dividends

Investors who are risk averse love a good value stock. These stocks with low PE ratios, modest debt to equity margins, and reasonable price to book ratios can offer more stability than your typical stock and can help to reduce risks in a portfolio.

And while value stocks might not be as ‘sexy’ as growth stocks these can actually outperform their growth-oriented counterparts. That is because not only are the profits you expect to reap from a growth stock not guaranteed, but it can be difficult for growth stocks to live up to expectations in the long run.

There isn’t nearly as much pressure on value stocks as there are for growth stocks, while a nice dividend payment can make up for a lot too. This holds true for small-cap value stocks as well, especially because these companies are largely overlooked by investors and they can be more U.S.-focused which is key when international markets are turbulent.

Below, we highlight three value stocks which could be interesting picks for a portfolio right now. We didn’t just pick these stocks because of their low price tags and market caps, but also because of the hefty dividends that they offer.

The returns over time from their inherent value being realized along with the hefty dividends that they pay out makes for a nice return rate in the long run while ‘buy’ ranks for the following three stocks doesn’t hurt either:

AGL Resources

AGL Resources (NYSE:GAS) focuses on distributing natural gas to customers in Georgia and part of Tennessee. The company was recently upgraded to a Zacks Rank #2 (Buy). Expect less volatility with this stock, as it has a beta of 0.31 while AGL Resources doles out a 4.03% dividend too.

AGL also holds a grade of “A” in the Value category of our Style Scores.AGL has a price to sales ratio of 1.29. It also has a price to book of 1.52. The fact that AGL has a debt to equity of 0.89 suggests that this company has its debt under control.

There have been 3 positive analyst estimate revisions in the last 60 days for this quarter. In that same time span, there have been no negative revisions. The Zacks Rank #2 (Buy) as well as a positive ESP of 2.38% makes AGL Resources a likely candidate to top our earnings consensus estimate when it reports its earnings on 8/4/15.

Aircastle Ltd

Aircastle Ltd (NYSE:AYR) acquires and leases jet aircraft to airlines across the world. AYR is a Zacks Rank #2 (Buy). It also doles out a handsome 3.58% dividend. Aircastle receives an “A” in the Value category of our Style Scores, which isn’t surprising when you see that AYR has a PE of 13.01, a debt to equity of 0, and a PEG of 1.51.

90 days ago, our earnings consensus estimate called for earnings of $0.43 per share for the quarter. Since then, our consensus has been revised. Our estimate now calls for earnings of $0.46 per share for this quarter. AYR reports its earnings before the market opens tomorrow, 5/6/15.

Douglas Dynamics, Inc

Douglas Dynamics NYSE:PLOWmakes and sells snow and ice control equipment for light trucks. The company recently upgraded to a Zacks Rank #2 (Buy). Douglas Dynamics pays out a 4.02% dividend. PLOW receives a grade of “A” in the Value Style Score. It has a price to sales ratio of 1.6. Douglas Dynamics also has a debt to equity of 1.08. It has a trailing twelve month PE of 12.3.

60 days ago, our earnings consensus estimated EPS of $0.46 for the quarter. However, our consensus has moved higher since then, now calling for earnings of $0.50 per share. PLOW has beaten our earnings consensus in each of the last four quarters. In fact, it has done so by an average of 80.69%. The company reported its earnings yesterday, and beat our consensus estimate by 185.71%. Douglas Dynamics reports earnings for this quarter on 8/31/15.

Original post