Most investors are familiar with large-cap stocks like Coca-Cola and IBM. Microcap stocks, on the other hand, are the smallest companies that trade publicly on the stock market.
Micro-cap stocks are publicly-traded companies with market capitalizations between $50 million and $300 million.
These 3 micro-cap stocks could have long-term growth potential, and also have dividend yields above 3% right now, making them attractive for dividend growth investors.
Norwood Financial (NWFL)
Norwood Financial Corp. (NWFL) is a bank holding company that operates through its subsidiary, Wayne Bank. The company is an independent community bank with over 14 offices in Northeastern Pennsylvania and approximately 16 offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York.
It operates a Wealth Management/Trust Department, which provides estate planning, investment management and financial planning to customers. As of September 30th, 2024, Norwood Financial Corp. had total assets of $2.280 billion, loans outstanding of $1.675 billion, and total deposits were $1.855 billion. The company was founded in 1870 and has 260 employees.
On October 28th, 2024, Norwood Financial Corp. released its third quarter results for the period ending September 30th, 2024. For the quarter, the company reported earnings of $3.8 million, which represented a 6.7% decrease compared to $4.1 million earned in the same period of 2023. Reported quarterly earnings per diluted share for the same periods were $0.48 and $0.51, reflecting a decline of 5.9%.
NWFL has increased its dividend for 32 years and currently yields 4.6%.
RGC Resources (RGCO)
RGC Resources, Inc. operates as a distributor and seller of natural gas to industrial, commercial, and residential customers through its subsidiaries: Roanoke Gas, Midstream, and Diversified Energy.
Residential customers are the company’s largest customer segment, accounting for ~58% of the total revenues, followed by commercial customers at 34%.
The company operates in three segments: Gas Utility, the key revenue generator; Investment in Affiliates; and Parent & Other. The company was founded in 1883 and generates just under $100 million in annual revenue.
On November 14th, 2024, RGC Resources announced its Q4 2024 results. The company posted non-GAAP EPS of $0.01, beating the market’s estimate by $0.02, and total revenues of $13.10 million, which were up 5.11% year over year.
The earnings growth was driven by higher contributions from the Mountain Valley Pipeline (MVP), primarily from Allowance for Funds Used During Construction (AFUDC) before the pipeline commenced operations in June 2024.
The continued demand for natural gas ensures that the company is stable with consistent financial performance over time. The company is expected to continue its growth trajectory in the coming years owing to a strong demand for natural gas as it remains the cheapest heat source compared with electricity and fuel.
RGCO has increased its dividend for 19 consecutive years and currently yields 4.1%.
Douglas Dynamics Inc. (PLOW)
Douglas Dynamics is a North American manufacturer and upfitter of commercial truck attachments and equipment. The company’s product portfolio and services are organized into two segments: Work Truck Attachments (WTA) and Work Truck Solutions (WTS).
Its WTA segment (accounting for 51% of the company’s 2023 sales) includes its commercial snow and ice control equipment, while its WTS segment (49% of sales) comprises its upfit of market leading attachments and storage solutions. Its leading brands are FISHER, SNOWEX, WESTERN, HENDERSON, and DEJANA.
On October 28th, 2024, Douglas reported third quarter 2024 results. For the quarter, Douglas generated $129 million in net sales, a 10% year-over-year decrease.
The sales decline was largely due to lower attachments volume, driven by low snowfall in the company’s core markets, offset by increased prices for its Solutions segment.
Douglas’ adjusted EPS was $0.24, one penny lower compared to the prior year quarter. The company’s leverage ratio at the end of the third quarter stood at 2.6X.
PLOW has increased its dividend for 13 consecutive years, and currently yields 5%.
Disclosure: No positions in any stocks mentioned
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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.
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