As S&P Dow Jones Indices notes, companies initiating dividends typically only do so if they intend to keep paying a dividend in the near future.From 1972 through 2012 companies that initiated or consistently raised dividends outperformed and were less volatile than the companies either did not pay, cut or kept dividends stagnant, according to Ned Davis Research. [Dividend Growth Via ETFs]
Although small-cap indexes remain at the low end of the dividend yield totem pole, more than half of IJR’s holdings are dividend payers and there is room for steady payout growth as “182 payers have a dividend rate less than 50% of their 12 month net GAAP income, with 235 being less than 75%,” according to S&P Dow Jones Indices.
“DES offers investors a fairly substantial dividend yield on small capitalization investments. For the dividend-focused investor, this is a viable way to get access to smaller capitalization companies, but it does have a very significant amount of volatility, so investors would be wise to ensure that the position is used as part of a larger diversified portfolio,” adds Seeking Alpha.
WisdomTree SmallCap Dividend Fund