2 Equities Offer 5.2%-Plus Yields and 37%-Plus Asset Appreciation
By: Ned Piplovic,
A collectibles authentication service and a business development company offer dividend payouts equivalent to 5.2% and 8.0% yields, respectively, to accompany their one-year share price increase of 51.5% for the first company and 37.1% for the second one.
With significant dividend yields and extraordinary share price growth, these two equities could be worthy additions to any portfolio for dividend income and asset growth. The two companies declared their most recent dividend payouts in April, with ex-dividend and pay dates coming up in mid-to-late May.
Collectors Universe Inc (NASDAQ:CLCT)
Collectors Universe Inc. provides authentication, grading and other related services for rare and high-value collectibles consisting of coins, trading cards, sports memorabilia and autographs. The company offers independent authentication and grading services under several brand names. Additionally, the company publishes several magazines, runs a certified coin exchange and operates three collectibles market websites — collectors.com, certifiedcoinexchange.com and collectorscorner.com. The company generates additional revenue by selling advertising in its magazines and websites, as well as organizing collectibles trade shows and conventions.
The quarterly dividend distribution of $0.35 is equivalent to a $1.40 annual payout and yields 5.2%. Since starting to pay a dividend in 2006, the company lowered its annual dividend only once. The payout did not change, but the company paid only one dividend in 2009. Over the last 11 years, the annualized dividend payout grew at an average annual rate of 15.7%. The current annualized payout rose five-fold over the last decade.
After losing about 40% of its value in late 2015, the share price took the entire 2016 to recover. The share price fluctuated mainly between $17.50 and $22 between late April 2016 and the beginning of February 2017, when it began its most recent uptrend. By early March 2017, the share price reached the 2015 level before the 40% drop and continued to rise to its current level above $27.
The 50-day moving average reversed its uptrends and started dropping in September 2016. By the time the share price hit its 52-week low in early October, the 50-day moving average was trending to cross the 200-day moving average in a bearish manner. However, the 50-day moving average reversed trend once again and has been rising ever since. The 50-day moving average continues the rising trend and is currently 16.4% higher than the 200-day moving average, which indicates that despite the 51.5% growth over the past year, the share price still might have room climb further.
Gladstone Investment Corporation (NASDAQ:GAIN)
Gladstone Investment Corporation is a business development company specializing in buyouts, recapitalizations, refinancing existing debt and debt securities. The fund seeks to invest in small and mid-sized companies based in the United States and does not invest in start-ups. Typically, the fund holds its investments for seven years and exits via sale or recapitalization, initial public offering or sale to a third party.
The current monthly dividend distribution of $0.064 reflects a 2.4% boost versus the previous period’s amount that converts to a $0.768 annual payout and and yields 8%. The company started its rising dividend payouts in 2005, but had to cut them in 2008 and 2009 during the financial crisis.
Gladstone Investment Corporation resumed its rising dividends strategy in 2010, but cut its annualized payout 3.4% in 2015. After two years of dividend boosts, its annualized payout is already back to 2014 levels. Even with a few dividend cuts and minor volatility, the annualized dividend payout grew at an average annual rate of 11.2% and has more than tripled since 2005.
The share price grew almost 40% between its 52-week low in early May and the end of August 2016. After dropping 23% by the beginning of November, the share price reversed course and rose to its current level, which happens to be not only a 52-week price high, but also the highest share price level in more than nine years.
The company will report its fourth quarter and fiscal year earnings after the stock market closes on Monday, May 15, 2017.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.