Individual investors have a key advantage compared to their institutional counterparts -- their opportunity set is much larger. Small-cap stocks, which are typically defined as having a market capitalization between $300 million and $2 billion, are generally too small for investors like Warren Buffett, but they can be lucrative for retail investors.
Small caps have historically outperformed large-cap stocks like those in the S&P 500 index in bull markets, although that hasn't been true in the current one due to the impact of the artificial intelligence (AI) boom in large-cap tech stocks and the effects of high interest rates on small-cap stocks.
Income investors will also be happy to learn that some smaller companies pay dividends, ranging from high-yield value stocks to faster-growing small-cap stocks.
Best small-cap dividend stocks for 2025
Below, we'll take a look at five of the best small-cap dividend players now available on the market.
| Company | Ticker | Market Cap | Dividend Yield |
|---|---|---|---|
| Calavo Growers | (NASDAQ:CVGW) | $420 million | 3.43% |
| Ethan Allen Interiors | (NYSE:ETD) | $716 million | 5.6% |
| B&G Foods | (NYSE:BGS) | $518.5 million | 11.75% |
| Kohl's | (NYSE:KSS) | $1.52 billion | 10.9% |
| Bloomin' Brands | (NASDAQ:BLMN) | $971.5 million | 8.4% |
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1. Calavo Growers
Calavo Growers may not be a household name, but you're likely familiar with its core product. Calavo, whose name comes from the first three letters of "California" and "avocados," is a leader in the global avocado industry, which has boomed during the past decade as the fruit has become a popular choice among millennials in dishes such as avocado toast and guacamole. Some consider it a "superfood."
The growing Hispanic population in the U.S., which is expected to double by 2050, is set to drive growth in avocado consumption since the tropical fruit is a staple food for many in that demographic.
Calavo stock followed breakout growth in avocados for a large part of the past decade as shares jumped as much as 350%, a rarity for an agriculture business. However, the stock has pulled back since the end of 2018 as avocado prices have fallen.
Lee Cole returned as CEO of Calavo in March 2023 and has focused on restoring the company's profits by controlling costs and focusing on high-margin products.
Calavo currently pays a quarterly dividend of $0.20, which was last paid in January 2025. After a dividend cut in 2022, the company doubled its dividend in 2024.
With promising long-term growth potential from exposure to the avocado market and a solid track record of dividend increases, Calavo appears to be a good bet for investors looking for both income and growth.
2. Ethan Allen Interiors
Home furnishings and home decor have boomed during the COVID-19 pandemic, and Ethan Allen is no exception. The stock has steadily rebounded since the lockdowns in spring 2020 and remains a strong option for dividend investors with a dividend yield of 5.6%. Because the stock is cheap, Ethan Allen also has a moderate payout ratio of just over 60%, meaning the company can continue to raise its dividend even if profits are flat.
Ethan Allen is unique among public companies in home furnishings because it's a vertically integrated luxury company that provides complimentary interior design services.
Additionally, many of its products are customizable, and most are built by artisans in North America. The company operates 142 design centers in North America, and has 45 in the rest of the world that are licensed and independently operated.
During a challenging period for home furnishings companies due to the housing slowdown, Ethan Allen's stock has been steady even as revenue has fallen.
The company has a history of paying out a special dividend once a year, in addition to its regular quarterly dividend, making it especially attractive to dividend investors.
3. B&G Foods
If you're looking for a reliable small-cap dividend payer, B&G Foods certainly looks like a good candidate. The eponymous maker of pickles and condiments -- and parent of brands such as Ortega, Green Giant, Cream of Wheat, and Weber grills -- proved its mettle during the COVID-19 pandemic as a recession-proof consumer staples stock, demonstrating a defensive positioning that's ideal for dividend stocks.
B&G has paid a dividend every quarter since its initial public offering (IPO) in 2004, and today, the company offers a dividend yield of 11.8%, which is better than most consumer staples options. It declared a dividend on Dec. 31, 2024, and it's paid a dividend every quarter since its IPO.
Because it's a company in a slow-growing industry, most of the returns to investors are likely to come from dividends, and management says it plans to allocate a "substantial portion" of its cash flow to dividends.
Like other packaged food companies, B&G aims to grow through acquisitions. In recent years, the company has acquired brands such as Crisco, Clabber Girl, McCann's Irish Oatmeal, Back to Nature Foods, and Victoria's Fine Foods.
As a high-yielding, recession-proof staple, B&G looks like a good choice for investors looking for a stable stock with a generous dividend payout.
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4. Kohl's
Kohl's is one of the nation's largest department store chains, but like much of the discretionary retail sector, the company has struggled with inflation and consumers cutting back on discretionary spending.
The business is declining, with revenue and comparable sales down 9% in the third quarter of 2025, but it's now searching for a new CEO who may be able to return the company to growth.
As Kohl's stock has fallen, its dividend yield has soared, and the company declared a $0.50 quarterly dividend in December 2024, giving it a yield of 15.3%. Kohl's hasn't yet reported fourth-quarter earnings, but that could be the biggest test yet of the sustainability of its dividend.
5. Bloomin' Brands
Like Kohl's, Outback parent Bloomin' Brands has also struggled with the weak market for consumer spending, and the stock fell through 2024.
Comparable sales fell at most of its chains in the third quarter of 2024, and adjusted earnings per share also fell almost 50% to $0.21.
Bloomin' Brands is also in the middle of a leadership change, having recently brought its CEO, Michael Spanos, to turn around the business. The company also is refranchising its operations in Brazil.
Bloomin' Brands pays a quarterly dividend of $0.24 a share, but the company will need to return to bottom-line growth for it to be able to sustain its dividend. Nonetheless, the 8.4% dividend yield is appealing to investors willing to wait out the recovery.
