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  • Sep 6, 2023 - High Dividend Stocks: 5 Small-Cap Companies Most Investors Have Probably Never Heard Of

High Dividend Stocks: 5 Small-Cap Companies Most Investors Have Probably Never Heard Of

Sep 6, 2023

High Dividend Stocks: 5 Small-Cap Companies Most Investors Have Probably Never Heard Of

When investing in smallcaps, you need to see if the smallcap firm under question has a history of regular payouts.

Dividends form an important part of your investing journey. They provide a steady stream of income and help you build wealth over time.

That is why dividend investing has proven to be a successful way to retire early.

The key here is to look for smallcap companies who have stood out in tough times, and rewarded investors by making regular payouts.

If these dividends come at a growth rate, that is an extra point to the company.

From the smallcap space, renowned companies which have consistently paid dividends and have shareholder friendly policies include Sanofi India, Bata India, Tata Investment Corp, Page Industries, Swaraj Engines, Oracle Financial Services, VST Industries, among other names.

But have you ever looked at relatively smaller peers apart from the above names?

In today's article, we look at five lesser-known smallcap stocks which have consistently paid dividends.

#1 Anuh Pharma

First on the list is Anuh Pharma.

The company is a bulk drugs manufacturer and one of the largest manufacturers of Macrolides and Anti-TB products.

The company's revenue split is divided almost equally between exports and domestic business.

Look at the table below to see the company's dividend history for the past few years.

Anuh Pharma Dividend History

Year Dividend per share (Rs) Dividend Yield (%) Dividend Payout (%)
31-Mar-23 2.0 2.5 27.7
31-Mar-22 1.8 2.0 28.7
31-Mar-21 1.5 1.7 26.4
31-Mar-20 2.8 2.4 48.2
31-Mar-19 2.8 2.0 29.4
31-Mar-18 2.8 1.8 41.7
31-Mar-17 2.5 1.2 31.2
31-Mar-16 2.5 1.3 24.3
31-Mar-15 7.0 1.4 26.6
31-Mar-14 7.8 5.6 36.8
Data Source: Ace Equity

The company's dividend history goes back to 1998. In financial year 2009, it declared the highest dividend of Rs 11.5 per share which resulted in a dividend yield of 7.8% back then!

In the latest June 2023 quarter, the company registered an impressive 40.6% growth in revenue and a 60% growth in net profit.

Going forward, new launches and approvals could drive its revenue and profit growth. The company is developing 11 new products around lifestyle disease.

It has also planned a capex of Rs 50 million (m) for capacity enhancement in the ongoing financial year.

In the past one year, shares of the company have gained over 40%.


To know more, check out Anuh Pharma's financial factsheet.

#2 Cheviot

Cheviot is the flagship company of the Cheviot group, which has interests in the jute, tea, and leather businesses.

It manufactures and exports high-value, non-traditional, diversified jute yarn and fabric, such as precision fine jute yarn, sacking cloth, hessian cloth and bags, sacking bags, and superior hessian cloth.

It has two manufacturing units in West Bengal, and a captive power plant in stand-by agreement with CESC Ltd.

The company generates around 40% of its revenue from exports. It exports to several countries including Belgium, Netherlands, Germany, Italy, USA, Saudi Arabia, Turkey, Japan, and Indonesia.

Cheviot has a long and rich dividend history, having declared dividends consistently for more than 25 years.

Cheviot Dividend History

Year Dividend per share (Rs) Dividend Yield (%) Dividend Payout (%)
31-Mar-23 27.0 2.7 29.8
31-Mar-22 60.0 5.3 45.5
31-Mar-21 175.0 23.9 144.8
31-Mar-20 48.0 9.5 64.5
31-Mar-19 1.0 0.2 1.3
31-Mar-18 1.0 0.1 0.8
31-Mar-17 1.0 0.1 0.9
31-Mar-16 17.0 2.4 21.0
31-Mar-15 17.0 5.0 22.2
31-Mar-14 15.0 4.8 25.3
Data Source: Ace Equity

In FY21, the company declared a dividend bounty and paid the highest dividend per share in its history.

Dividend payments have been a core focus for Cheviot. The special dividend of Rs 175 it paid was funded by internal accruals and retained earnings.

The company undertook a capex to set up a new weaving unit last year.

In the first quarter, the company's revenue dropped almost 30% YoY to Rs 1.2 bn while profit rose to Rs 170 million from Rs 100 million reported in the year-ago quarter.

In FY23, the company also reduced debt and brought the debt to equity down to 0.1x.

In the past one year, shares of the company have traded in a tight range.


For more details, see Cheviot Company fact sheet and quarterly results.

#3 Plastiblends India

Third on the list of lesser known smallcaps paying big dividends is Plastiblends India.

The company manufactures white, black and coloured masterbatches and compounds used primarily as colouring agents in plastics.

It is among the largest manufacturers of masterbatches in India, accounting for approximately 10-12% of the organised domestic masterbatch industry.

With more than two decades of consistency in paying dividends, Plastiblends has come a long way in maintaining a healthy dividend payout each and every passing year.

Plastiblends India Dividend History

Year Dividend per share (Rs) Dividend Yield (%) Dividend Payout (%)
31-Mar-23 4.0 2.6 38.7
31-Mar-22 4.0 2.0 28.3
31-Mar-21 4.0 1.8 27.4
31-Mar-20 3.8 3.3 26.2
31-Mar-19 2.8 1.4 22.9
31-Mar-18 2.5 1.3 23.8
31-Mar-17 2.5 0.5 9.9
31-Mar-16 7.0 1.8 24.2
31-Mar-15 5.5 2.5 23.8
31-Mar-14 5.0 4.1 23.9
Data Source: Ace Equity

During its early years when it was a penny stock trading between Rs 10 and Rs 95 in 1998-05, the company's dividend yield went as high as 12%!

Hit by higher input costs, the company posted weak earnings for Q1 ended June 2023.

Profits declined 24% to Rs 76 m while revenues fell 4.2% to Rs 2 bn.

During the quarter under review, energy cost per KWH increased substantially in all of the company's manufacturing locations.

The company's MD said that Plastiblends remains focused on its strategy of increasing revenue from margin accretive products and is giving huge impetus on R&D, increasing customer base and geographical expansion.

It has strong presence in the Middle East and African markets.

The volatile nature of the company's products (commodities) has exposed it to raw material cost fluctuations over the years.

Still, it has maintained a better operating margin than its peers because of its strong market position and ability to develop value-added products.

In the past one year, shares of the company have gained 4% with most of the recovery seen in the current bull run.


Data Source: Ace Equity

To know more, check out Plastiblends' financial factsheet.

#4 Sukhjit Starch & Chemicals

Fourth on this list is Sukhjit Starch & Chemicals.

The company is involved in the agro-processing industry, manufacturing starch & its derivatives including liquid glucose, sorbitol, modified starches, and by-products.

These products find application in diverse industrial and commercial applications such as food & drink, paper & board, personal care & pharma, textile, FMCG, animal and pet foods, etc.

Coming to its dividend history, the company has maintained a rich payout track record for more than 20 years.

In FY22, it disbursed the highest dividend amount in its history (Rs 148 m) followed by Rs 125 m in FY23.

Look at the table below.

Sukhjit Starch Dividend History

Year Dividend per share (Rs) Dividend Yield (%) Dividend Payout (%)
31-Mar-23 8.0 2.1 19.7
31-Mar-22 10.0 1.9 21.5
31-Mar-21 3.0 1.5 21.2
31-Mar-20 2.0 1.5 8.9
31-Mar-19 7.5 2.9 26.6
31-Mar-18 6.5 1.4 21.2
31-Mar-17 5.0 1.7 20.1
31-Mar-16 5.0 2.1 16.4
31-Mar-15 5.0 2.0 16.1
31-Mar-14 3.5 1.8 16.3
Data Source: Ace Equity

The company has improved the payout ratio in the past two years, and we won't be surprised if it continues the trend in FY24.

In the investor presentation for FY23, the company mentioned that it is positioning itself in a new way as part of its next big leap.

This new positioning aims to migrate customers in Tier 2 and 3 cities from the unorganized sector to the organised sector.

After seeing steady demand from packaging, FMCG and pharma segments in FY23, the company started off the first quarter on a tepid note with operating margins declining to 9%.

Going forward, however, the management has guided for better quarters as the company will generate more revenue from new customers like Mankind Pharma, Leeford Healthcare, and Akums Drugs.

For FY24, it has planned a capex for upgrading and modernizing key equipment to ramp up the existing capacities.

In the past one year, shares of the company have declined about 17%.


To know more, check out Sukhjit Starch's financial factsheet.

#5 Bhageria Industries

Last on the list is Bhageria Industries.

The company is engaged in manufacturing and trading of dyes & dyes intermediates and generation and distribution of solar power.

Under the chemical division, it manufactures Vinyl Sulphone, H-acid, and Gamma acid key dye intermediate.

Under solar, it has a solar power plant for captive consumption, which has a 25-year power purchase agreement with Solar Energy Corporation of India.

The company has maintained consistency in paying dividends for more than 20 years.

Bhageria Industries Dividend History

Year Dividend per share (Rs) Dividend Yield (%) Dividend Payout (%)
31-Mar-23 1.0 0.9 29.0
31-Mar-22 4.0 1.8 24.8
31-Mar-21 3.5 2.2 24.5
31-Mar-20 3.0 3.9 19.9
31-Mar-19 6.0 2.2 18.3
31-Mar-18 5.5 2.0 21.7
31-Mar-17 5.0 1.6 18.3
31-Mar-16 5.0 3.6 26.0
31-Mar-15 5.0 3.8 10.9
31-Mar-14 3.5 11.9 18.1
Data Source: Ace Equity

Although in FY23, the dividend payout was the lowest in the past 10 years.

In the financial year 2023, the company went through a rough patch where profits declined to multi-year lows and revenue stabilised after a high base in FY22.

This was due to volatility in raw material prices and finished goods prices.

Going forward, however, things could change. In recent years, the company's contribution of revenue and profit from the solar division has picked up pace.

And with India focusing more on solar each passing day, this segment could see a sharp re-rating.

The company has its AGM coming up later this week on 9 September 2023.

In the past one year, shares of the company have fallen around 12%.


To know more, check out Bhageria Industries financial factsheet.

Since you're interested in dividend stocks, use Equitymaster's stock screener to check high dividend yield stocks and the best dividend stocks to buy.

Here are some popular dividend and smallcap screens:

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Yash Vora

Yash Vora is a financial writer with the Microcap Millionaires team at Equitymaster. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.

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