What are Small-cap stocks?
Small-cap is a term that consists of companies that are not large-cap nor mid-caps. Smallcaps fall under the market capitalization of roughly Rs.5,000 Cr. This classification can improve with a change in a company's market valuation. Market capitalization refers to the market value of a company's astounding number of shares available.
However, the club is also subject to a company's rank in the benchmark criteria, such as Sensex and Nifty. For example, the businesses listed from 251st – 500th in the Nifty Index are generally held small-cap companies. Nifty also has a benchmark small-cap index in the USA called the Nifty Smallcap 50, which hosts the top 50 most traded small-cap securities in the market.
Calavo Growers
Calavo Growers may not be a family name, but you're likely to close with its core product. Calavo, whose name arises from the first three letters of "California" and "avocados," guides the global avocado trade, which has increased during the past decade. The fruit has become a standard option amongst millennials in dishes such as avocado toast and guacamole.
Calavo stock supported breakout growth in avocados for a large part of the past decade as shares dropped as much as 350%, a rarity for the agriculture business. The stock has pulled back since the end of 2018; however, as avocado prices have fallen and it's faced some difficulties related to the COVID-19 pandemic, although it's dismissed off its 2020 lows. Because it's a grower, results at Calavo, which also produces tomatoes and papayas, tend to vary with market prices, but the company is a stable, dividend-paying stock.
Ethan Allen Interiors
Home furnishings and home decor have grown during the pandemic, and Ethan Allen is no exception. The stock has regularly rebounded since the lockdowns last spring and looks to be headed for further gains as it reached a record order backlog in the year-end quarter. Supply chain difficulties during the pandemic have shown on the business, but interest is strong as retail orders rose 45% in the area and wholesale orders jumped 28%.
Ethan Allen is different among public companies in home furnishings because it's a vertically open luxury company that provides complimentary interior design services. Additionally, many of its outcomes are customizable, and artisans build most in North America. The company has approximately 300 design centres worldwide, with about 180 in the U.S., most of which are company-owned, and 100 authorized stores in China.
B&G Foods
If you're looking for an excellent small-cap dividend payer, B&G Foods certainly looks like a good candidate. The eponymous maker of pickles and condiments and parent of names including Ortega, Green Giant, Cream of Wheat, and Weber grills should prove its mettle when the coronavirus pandemic as a recession-proof consumer staples stock, demonstrating a defensive positioning that's ideal for distribution stocks.
B&G has paid a profit every quarter since its IPO in 2004, and today the company offers a bonus yield of 7%, which is a better payoff than most consumer staples choices. Because it's a company in a slow-growing industry, most of the investors' results are likely to come from dividends. Management states that it plans to allocate a "substantial portion" of its cash flow to tips. In 2018-2019, almost all of its operational cash flow went to regular payouts, although that's in part due to a one-time $44.7-million tax credit linked to the sale of Pirate Brands. In 2020, sales and profits rose due to pandemic-driven demand for markets and shelf-stable foods.
PetMed Express
Like packaged foods, pet products are recession-proof, and spending on pets has been shown to increase during tough times. The pandemic's early months spurred a spike in pet adoptions that should benefit PetMed Express over the long run. The online pet pharmacy benefits as 1800petmeds.com and 1-800-PET-MEDS and declares itself the country's largest pet pharmacy.
The company has higher than 2 million consumers and is the online leader in a $5.5-billion industry. Most customers are repeat visitors who will stay with the company for years, giving it a reliable revenue source and high lifetime value from its customer base. Historically, the company has worked at double-digit operating margins, and continued growth should allow it to better leverage its operating costs.
Smith & Wesson
Love them or hate them, guns are big business in the U.S. and worth viewing as a source of dividend income. Like any of the stocks above, handgun maker Smith & Wesson manages to thrive in challenging times as social upheaval, particularly the kind we've seen over the past year, often leads to a run on guns. The social unrest that swept the country following the killing of George Floyd led Smith & Wesson's sales to more than double within the first half of fiscal 2021, and its performance could rest raised, especially following the rebellion at the Capitol in January and the uncertainty around the coronavirus pandemic and the economy.
