From 208-Year-Old Utilities to Modern BDCs: Where Safe Income Meets Growth

1 month ago 24

William Temple

Wed, December 17, 2025 astatine 8:13 AM CST 6 min read

A graphic titled 'SAFE SMALL CAP DIVIDENDS' displays 5 rectangular cards connected a airy grey inheritance with a subtle grid pattern. Each paper features an icon, institution name, ticker, dividend yield, and a descriptive phrase. From near to right: a harmless icon for Cathay General Bancorp (CATY) with 0.67% yield; a h2o driblet and faucet for York Water Company (YORW) with 2.59% yield; an upward arrow with a dollar motion for Banner Corporation (BANR) with 2.87% yield; a barroom illustration with an upward arrow and dollar motion for Newtek Business Services (NEWT) with 6.43% yield; and a calendar with a dollar motion for Gladstone Investment Corp (GAIN) with 6.91% yield. The bottommost substance states 'Data points correspond cardinal output oregon maturation metric, emphasizing information and reliability.'

Cathay General Bancorp maintains a 7.9% payout ratio and repurchased $50.1M successful Q3 arsenic portion of a $125M buyback program.
Banner Corporation raised its dividend 4% to $0.50 aft 3 years with nary increases. Q3 EPS of $1.54 bushed estimates.
Gladstone Investment Corp pays monthly dividends yielding 6.91% positive periodic specials. ROE reached 18.7%.
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Small headdress dividend stocks connection an appealing operation of income and maturation potential, but information remains paramount for investors seeking reliable distributions. Among sub-$10 cardinal companies paying dividends, six names basal retired for their committedness to shareholder returns backed by operational spot and blimpish payout policies.

These companies scope from a 208-year-old h2o inferior to modern concern improvement corporations, spanning marketplace caps from $349 cardinal to $8.11 billion. What unites them is accordant payments, sustainable payout ratios, and concern models generating predictable currency flows adjacent during economical uncertainty.

Cathay General Bancorp (NASDAQ:CATY) offers the lowest output astatine 0.67%, but that ultra-conservative organisation reflects exceptional fiscal discipline. With a marketplace headdress of $3.48 billion, the determination slope reported Q3 nett income of $77.7 cardinal contempt missing net estimates.

The bank's payout ratio sits astatine conscionable 7.9% of earnings, leaving important country for dividend maturation arsenic absorption prioritizes superior deployment done stock repurchases. During Q3, Cathay repurchased $50.1 cardinal successful banal astatine an mean outgo of $42 per share, portion of a $125 cardinal buyback program. Management plans to proceed repurchasing astir $35 cardinal per 4th done Q1 2025.

CEO Chang Liu noted non-accrual loans accrued to 0.84% of full loans, chiefly from a azygous $38 cardinal relationship. However, the slope maintains beardown collateral sum with an mean loan-to-value ratio of 49% crossed its commercialized existent property portfolio. CFO Heng Chen explained the slope recorded a $14.5 cardinal proviso for recognition losses successful Q3, raising the reserve-to-loan ratio to 0.85%, oregon 1.08% excluding residential mortgages.

With deposits of $20.52 cardinal (up 2.6%) and loans of $20.10 cardinal (up 1.6%), Cathay demonstrates dependable equilibrium expanse growth. The bank's ROE of 10.6% and nett involvement borderline of 3.31% presumption it good arsenic deposit costs diminution from maturing certificates of deposit presently yielding 4.82%.