Investors interested in small-cap companies should take a look at four stocks, writes investment author John Navin in a Forbes column. These companies share common traits: a low P/E ratio (price-to-earnings ratio: the lower it is, the higher the potential), dividend payments, and inclusion in the Russell 2000 index.
Civitas Resources
Civitas Resources is engaged in the exploration and production of oil and gas in the DJ Basin in Colorado, as well as in the Permian Basin in West Texas and New Mexico. The company calls itself the first carbon-neutral producer of these fossil fuels in Colorado.
Its shares trade with a P/E ratio of 8.26. For the fourth quarter of 2023, it paid dividends of $1.45 per share to shareholders. Overall, Civitas returned about $1 billion to investors last year through dividends and buybacks. This amounts to over 16% of the company’s market capitalization, according to its reports.
Hannon Armstrong Sustainable Infrastructure Capital
HASI invests in assets that facilitate the energy transition. For example, it invests in the construction of buildings that use solar energy, alternative energy projects, and projects aimed at reducing environmental impact. Among the latter are the restoration of tidal wetlands on the Sacramento River. According to HASI, its portfolio includes assets worth $6.4 billion.
Its shares trade with a P/E ratio of 14.32. Reporting on the fourth quarter and the full year of 2023, HASI promised to pay shareholders dividends of $0.415 per share in the first quarter of 2024, 5% more than it declared in the fourth quarter of 2023.
Patterson Companies
Patterson Companies is a distributor operating in two segments: dentistry and veterinary. It supplies products, technologies, software, and more to players in these industries.
Patterson’s shares trade with a P/E ratio of 12.38. On March 11, the company announced quarterly dividends of $0.26 per share. In the 2024 fiscal year (ended April 27, 2024), the company returned $327.9 million to shareholders through dividends and share buybacks, it reported.
Safe Bulkers
This marine cargo carrier transports grain, coal, and iron ore worldwide.The company operates 45 vessels with a total deadweight (the total load capacity including cargo, fuel, passengers, etc.) of 4.8 million tons.
Safe Bulkers’ shares trade with a P/E ratio of 8.84. Reporting on 2023, it announced dividend payments of $0.05 per share. It will pay the same amount to shareholders for the first quarter of 2024.
