After underperforming large cap stocks, small cap valuations have become attractive.
In fact, as noted by Alliance Bernstein:
“Meanwhile, small-cap stocks are also trading at extremely depressed valuations—the lowest in 20 years—compared to larger companies, based on price-to-earnings ratios. Investors have discounted further potential hazards for small-caps, without regard to company fundamentals. So, we think firms that offer resilient business models will stand out and benefit the most along the road to recovery,” they added.
Granted, you can always trade a Russell 2000 ETF or hunt for small-cap stocks to buy.
But what if you could gain exposure and get paid for it?
Not just with price appreciation, but with dividends, too.
Look at the Infrastructure Capital Small Cap Income ETF (SCAP), for example.
With an expense ratio of 1.35% and a 30-day yield of 6.03%, the Infrastructure Capital Small Cap Income ETF (SCAP) attempts to “achieve an above-average yield by investing 80% of its net assets in a diversified portfolio of small-capitalization equity securities,” as noted by the InfraCapFund.com site. It also just paid out a monthly dividend of $0.20 per share on June 30.
To be added to the SCAP ETF portfolio, companies need strong earnings, free cash flow, consistent dividends and strong payout ratios.
It’s why the fund has been investing in financials, real estate investment trusts (REITs), industrials, and investment funds.
Most recently, that’s included the iShares Russell 2000 ETF (IWM), StoneX Group (SNEX), East West Bancorp (EWBC), Plains GP Holdings (PAGP), Woodward Inc. (WWD), SLM Corp. (SLM) and Chord Energy (CHRD), to name a few.
All of which makes the SCAP ETF even more attractive.
Again, not only can you make money from a potential small-cap recovery, but you can also sit back and collect its respectable yield of 6.03%.
Trending Now: Virtually Limitless Energy?
Have researchers at MIT just unlocked the “holy grail” of clean energy?
Scientists have recently made a breakthrough in a radical new power source we’re calling “Helios” technology.
This game-changing tech could create up to 100 million times more energy than coal, oil, or natural gas.
It produces no carbon emissions or long-lived radioactive waste.
And – most incredibly of all – its primary fuel is the most abundant element in the universe.
In other words, this marvel of physics has the potential to generate virtually limitless energy.
And scientists at an obscure startup have just made a breakthrough that could trigger mass adoption.
This startup could become the Nvidia of “Helios” Technology.
