While large cap dividend shares like Telstra Corporation Ltd (ASX: TLS) and Australia and New Zealand Banking Group (ASX: ANZ) deservedly get a lot of attention from investors, I think if you only focus on that side of the market you could miss out on some quality options at the small-end.
Two small cap dividend shares that I think are well worth considering today are listed below. Here's why I like them:
Baby Bunting Group Ltd (ASX: BBN)
One of my favourite retail shares right now is this baby products retailer. Its shares have come under significant pressure over the last 12 months after becoming a victim of its own success. The company's growth has led to a number of competitors closing down. Whilst this is good in the long-term, in the short-term it is a headwind for Baby Bunting because it means heightened levels of clearance sales. The good news, though, is that there are signs that these headwinds are subsiding now, putting the company in a position to win the vacated market share and improve its margins. I expect this to lead to strong profit growth in FY 2019 and a sizeable lift to its generous dividend. At present Baby Bunting's shares provide a trailing fully franked 5.2% dividend.
Money3 Corporation Limited (ASX: MNY)
I thought that this growing financial services company delivered one of the better half-year results in the small cap space during earnings season last month. Thanks to the continued success of its secured auto loans business, Money3 reported an 18.5% increase in its gross loan book to $292.8 million despite having just a 2% share of the second-hand automotive finance market. This led to Money3 achieving a 12.3% increase in half-year net profit after tax to $15.5 million. Because of this strong performance, the Money3 board decided to pay a fully franked interim dividend of 4.5 cents per share. This was an increase of 80% on the prior corresponding period and means that Money3's shares now provide investors with a trailing 3.9% yield.
