3 Small Cap Stocks With Consistent Dividends and Above-Market Yields

Investors looking for high dividend yields will likely focus on large-cap stocks. But small-caps can be worthwhile dividend investments as well.

Russell 2000 stocks are the world’s most well-known index of small-cap stocks, which generally have market capitalizations below $2 billion. Investors typically associate small-cap stocks with growth. And while this reputation is deserved, there are also small-caps that pay dividends to shareholders.

These 3 small caps have low valuations and high dividend yields, significantly above the average yield of the S&P 500 Index right now.

1. Universal Corporation (UVV)

Universal Corporation (NYSE:UVV) is the world’s largest leaf tobacco exporter and importer. The company is the wholesale purchaser and processor of tobacco that operates between farms and the companies that manufacture cigarettes, pipe tobacco, and cigars. Universal Corporation was founded in 1886 and is headquartered in Richmond, Virginia.

With 54 years of dividend increases, Universal Corporation is a Dividend King.

Universal Corporation reported its fourth quarter earnings results in June. The company generated revenues of $702 million during the quarter, which was considerably less than the revenues that Universal Corporation generated during the previous period. Revenues were also down on a year-over-year basis.

This was a weaker performance compared to the last couple of quarters, when Universal was able to grow its revenues on a year-over-year basis. Overall, 2025 was a year during which the company grew its revenues by 7%.

Universal Corporation’s earnings-per-share during fiscal 2024 were around 25% higher than the earnings-per-share that Universal generated during fiscal 2015, around one decade earlier. There were some ups and downs in Universal’s earnings-per-share over that time frame, with a minor upward trend in place.

As the leader in a declining industry, we do not expect the company to deliver strong business growth in the future, with some price increases over time being one of the levers Universal can pull in the long run. The company’s earnings per-share could still grow going forward.

Universal Corporation’s shares trade at a moderate valuation based on the earnings and cash flows that the company generates, and Universal Corporation also does not need to invest large amounts of money into its business, as the industry is not experiencing any meaningful growth. This gives Universal Corporation the ability to utilize some of its free cash flows for share repurchases.

Universal Corporation is active in an industry that has seen its peak. This means that its growth outlook on a company wide basis is not positive. On the other hand, this means that there is no need for large investments, which results in relatively high free cash generation. The company also does not have to worry about competition from new market entrants.

UVV stock currently yields 6.5%.

2. Apollo Bancorp (APLO)

Apollo Bancorp Inc (OTC:APLO), through its subsidiary Apollo Trust Company, operates five branches, all located in Pennsylvania. These branches serve communities primarily within the Kiski Valley, northeast of Pittsburgh. The bank’s main office is in Apollo, Pennsylvania, with additional branches in North Apollo, Spring Church, Allegheny Township, and North Washington.

Apollo Trust focuses on providing personalized banking services, including residential and commercial loans, deposit accounts, and other financial services, primarily to individuals and businesses within its service area.

APLO has continued to generate strong growth in 2025. On July 16th, 2025, Apollo Bancorp posted its Q2 results for the period ending June 30th, 2025. For the quarter, Apollo reported net income of $505,000, or $0.98 per share, compared with net income of $450,000, or $0.87 per share, in the prior-year period.

The $55,000 year-over-year increase in earnings was powered by a $206,000 increase in net interest income, offset by a $94,000 increase in noninterest expense. For Q2, Apollo posted annualized ROA of 0.95% and annualized ROE of 8.00%.

Apollo Bancorp’s EPS track record over the past decade reflects somewhat steady, yet slow growth. In 2015 and 2016, the bank experienced stable EPS growth. Apollo Bancorp, which focuses on traditional banking services, saw steady loan demand but was limited by these industry-wide conditions.

As the economy began recovering in 2021 after the pandemic ended, Apollo Bancorp’s EPS rebounded to $3.66 and remained stable at $3.68 in 2022. The recovery was aided by economic stimulus measures and an increase in borrowing activity, alongside rising interest rates, which contributed to higher net interest margins. Moreover, Apollo Bancorp benefited from lower credit losses during this period, supporting its profitability.

Looking ahead, we expect EPS growth to remain modest at around 2%, driven by Apollo’s concentrated regional focus and its conservative capital management, which limit significant growth opportunities. Apollo has raised its dividend for 16 consecutive years, with incremental raises of $0.01 per quarter, or $0.04 annually, over the past decade.

APLO stock currently yields 5.1%.

3. Stepan Co. (SCL)

Stepan Company (NYSE:SCL) was founded in 1932 and at the outset, it sold only one product: a chemical to keep dust down on Illinois’ country roads. Since that time, it has grown to manufacture basic and intermediate chemicals, with surfactants making up most of its revenue.

Stepan is also a Dividend King, having increased its payout for 57 consecutive years.

Stepan posted second quarter earnings on July 30th, 2025. Adjusted earnings-per-share came to $0.52 for the quarter. Revenue was up 7% year-over-year to $595 million. Surfactant sales were $412 million, with selling prices soaring 11% on pass-through of raw material costs, primarily. Sales volumes were down 1%. Polymers net sales were up 2% to $163 million. Specialty Product sales were $20.5 million, up 22%.

Adjusted EBITDA was $51.4 million, up 8% year-over-year. Adjusted net income was $12 million. Cash from operations came to $11.2 million, and free cash flow was negative $14.4 million on higher working capital requirements, as well as raw material builds.

The company’s competitive advantage is in its diverse, global customer base and many decades of engineering experience. Stepan’s competitors cannot easily supplant its position with existing customers given the often-custom nature of what Stepan engineers for them.

With a 2025 dividend payout ratio of 48%, SCL’s dividend is highly secure. SCL has increased its dividend for 57 years.

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Disclosure: No positions in any stocks mentioned

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