Small caps offer dividend hope too

SMALL CAP DIVIDENDS

The prospects for recovering profits within the FTSE 100, enabling companies to resume or increase dividends, should not mask some excellent investment opportunities outside large caps.

Robin Geffen was correct in his recent article, ‘Dividends: it's not all bad news'. Many income stocks are on more attractive P/E multiples than the market - presenting an excellent buying opportunity - and the outlook for dividend growth is indeed better than current news flow would suggest. The investable universe of smaller and mid-cap companies with strong balance sheets, stable revenue streams and a consistent track record of growing their dividend whilst maintaining good cover has long been under-appreciated.  Yet over the course of the past 18 months cash generation in this area ...