Earn 5.2% from This Small-Cap Company

For income investors, the most important number for a stock is the company’s dividend yield. But not all dividend yields are supported by the business’ operations. For instance, if a company is struggling to generate enough cash flow to pay the dividend, there is the possibility of a dividend cut. No investor ever wants to see that happen to one of the investments in their portfolio. Rather, they want to support their retirement or generate extra cash flow at a steady or growing rate. Once you’ve gone over a stock’s dividend yield, you may want to ask yourself if the business will continue to grow over the next 10 or 20 years. If the answer is “yes,” then consider taking a harder look at the investment.

Orchids Paper Products Company (NYSEMKT:TIS) stock, with its dividend yield, meets all the criteria of a stock worth considering. A paper product manufacturer with a market cap of $282.1 million, Orchids may be a boring business, but it’s also a steady one. Orchids’ products include paper towels, bath tissue, and paper napkins. The name of the company may not be familiar, but its brands should ring a bell, including the likes of “Colortex,” “Velvet,” and “Virtue.” Once you’ve gone over a stock’s dividend yield, you may want to ask yourself if the business will continue to grow over the next 10 or 20 years. If the answer is “yes,” then consider taking a harder look at the investment.

Source: Income Investor

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