This “Small” 7.2% Dividend Is an Oasis of Cheap in a Pricey Market
Michael Foster, Investment StrategistUpdated: September 1, 2025
Large cap stocks have been crushing small caps in the last few years. That’s, well, unusual, to say the least. And it’s set us up for cheap 7.2% dividends (with upside).
Small Caps Take a Detour
Small caps, of course, aren’t known for big dividends. The benchmark ETF for them, the iShares Russell 2000 ETF (IWM)—in orange above—only pays 1.1%. But stick with me for a moment and I’ll show you how we’re going to pull this off.
Mega-Caps Steal the Spotlight, Setting Up Small-Cap Bargains
Around the time of the pandemic, small caps started lagging the S&P 500 after years of tracking it.… Read more