While a lot of small-cap shares are focused on growth and offer little by way of dividends, this isn't the case for all of them.
Three small-cap shares which offer generous dividends are listed below. Here's why I think income investors ought to give them a look:
Codan Limited (ASX: CDA)
Based on this technology company's guidance for FY 2018, I expect its shares to provide a fully franked 3% dividend over the next 12 months. Although historically Codan's earnings are lumpy and difficult to predict, the company is looking into putting its strong balance sheet to use by diversifying the business through acquisitions. Further to this, a new range of products, including its next generation dual-sensing countermine detector, are expected create sales opportunities from FY 2019 onwards.
Lifehealthcare Group Ltd (ASX: LHC)
Despite a stellar share price gain over the last six months, this medical device company's shares provide a trailing partially franked 5% dividend today. I expect this could grow at a solid rate over the coming years thanks to the strong demand for healthcare, driven by an ageing population, emerging technology, and rising rates of chronic disease. Management recently reiterated its full-year guidance of high single to low double digit growth in revenue, underlying EBITDA, and underlying earnings per share.
Think Childcare Ltd (ASX: TNK)
This fast-growing childcare centre operator's shares provide investors with a trailing fully franked 4.5% dividend. Thanks to Think's pipeline of childcare centres waiting to be acquired via its incubator program and positive changes to childcare funding, I believe the company could grow its earnings and dividend at an above-average rate over the coming years. This could make it a great option today.
