Which small-cap stocks look attractive currently? We used the TipRanks’ Stock Screener tool and filtered small-cap stocks offering a more than 10% dividend yield and having a “Strong Buy” rating, according to analysts.
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A small-cap stock is defined as the stock of a company with a market capitalization between $300 million and $2 billion. These stocks have the potential to outperform expectations when macroeconomic conditions are favorable. Small-cap stocks carry a higher risk-reward profile than large-cap stocks. Investors must conduct thorough research before deciding to invest in them.
Ellington Financial (EFC) – Ellington is an investment management company that invests in a broad range of financial assets. Notably, EFC is incorporated as a REIT (real estate investment trust) and is required to pay 90% of its annual taxable income as dividends. EFC stock pays a regular monthly dividend of $0.13 per share, reflecting an attractive yield of 13.1%.
With five unanimous Buy ratings, EFC stock has a Strong Buy consensus rating on TipRanks. The average Ellington Financial price target of $13.60 implies 2.9% upside potential from current levels. Recently, Maxim Group analyst Michael Diana reiterated a Buy rating on EFC stock with a price target of $14.5 (9.7% upside). Diana is encouraged by EFC’s growing core earnings and the potential benefits from the acquisition of Arlington Asset Investment Corp.
KKR Real Estate Finance Trust (KREF) – KKR Real Estate Finance Trust is a real estate company with a focus on originating senior loans secured by institutional-quality commercial real estate assets, mezzanine loans, preferred equity, and other debt-oriented instruments in top markets with strong underlying fundamentals. KREF stock pays a regular quarterly dividend of $0.25 per share, reflecting an above-sector average yield of 11.98%.
On TipRanks, KREF has a Strong Buy consensus rating based on four Buys and one Hold rating. The average KKR Real Estate Finance Trust price target of $12.30 implies 10.1% upside potential from current levels. Interestingly, KREF is externally managed by renowned global investment firm, KKR & Co. (KKR).
MFA Financial (MFA) – MFA Financial also operates as a REIT company and invests in residential mortgage-backed securities and residential whole loans on a leveraged basis. MFA stock pays a regular quarterly dividend of $0.35 per share, implying a solid yield of 11.99%.
MFA boasts a Strong Buy consensus rating backed by three unanimous Buy ratings. On TipRanks, the average MFA Financial price target of $13.17 implies 11.1% upside potential from current levels. The company recently announced strategic changes to its leadership and board, with an aim to solidify its team and boost future growth.
To find more small-cap investment ideas like these, you can take a look at TipRanks’ Stock Screener tool.
