As of mid June, the Russell 2000 is running laps around all of the other major U.S. indices, and the outperformance is not even close. Starting the week of June 15th, the Russell 2000 is up by almost 18%, which is nearly double the Nasdaq’s 10.1% year-to-date gain; the S&P 500 is up 8%, and the venerable Dow Jones Industrial Average is up 6.4%. The Russell 2000 is explicitly constructed as the benchmark for the U.S. small-cap segment. It consists of the smallest 2,000 companies (by market capitalization) in the broader Russell 3000 Index, which covers roughly 98% of the investable U.S. equity market.
Investors have rotated toward smaller companies as optimism builds around a resilient economy. While the prospect of lower interest rates may have to wait until next year, as inflation has returned due to rising energy prices and supply chain issues, growing unease about how concentrated the market is in a handful of giant tech stocks has led to a change of direction, and the shift has paid off; small-caps have punched above their weight for stretches this year, at times stringing together consecutive sessions of outperforming the S&P 500 and touching record highs, even as large-cap indexes whipsawed on the back of turbulence in the tech sector.
We screened the Russell 2000 index, looking for the highest-yielding stocks. Still, we purposely avoided REITs, MLPs, BDCs, and royalty trusts, which often carry even higher yields, as many of those investments require a K-1, which can prove troublesome come tax time.
Haverty Furniture Companies
With a strong footprint in fast-growing parts of the country and a reliable 5.42% dividend, this is a solid idea for conservative investors to consider. Haverty Furniture Companies (NYSE: HVT) is a specialty retailer of residential furniture and accessories. The Company operates approximately 129 stores in 17 states in the Southern and Midwest regions of the United States.
The Company purchases its merchandise from numerous domestic and foreign manufacturers and importers. It carries a variety of mattress product lines, including:
- Tempur-Pedic
- Serta
- Stearns & Foster
- Beautyrest
- Sealy
Its distribution and delivery system uses a combination of three distribution centers (DCs) and four home delivery centers (HDCs). It uses third-party providers to handle over-the-road delivery of products from DCs to HDCs and market areas.
Kearny Financial
This East Coast bank pays a solid 5.08% dividend and looks ready to break out to new 2026 highs. Kearny Financial (NASDAQ: KRNY) is a holding company for Kearny Bank, a New Jersey-chartered savings bank that is principally engaged in attracting deposits from the general public and using these deposits, together with other funds, to originate or purchase loans for its portfolio and for sale in the secondary market.
Its loan portfolio comprises multi-family mortgage loans, non-residential mortgage loans, commercial business loans, construction loans, one-to-four-family residential mortgage loans, home equity loans, and other consumer loans.
The Company also maintains a portfolio of investment securities, primarily comprising United States agency mortgage-backed securities, obligations of state and political subdivisions, corporate bonds, asset-backed securities, and collateralized loan obligations.
The Bank has 43 retail branch offices located throughout northern and central New Jersey, as well as in Brooklyn and Staten Island, New York.
Shutterstock
This is a company many rely on for images for publications and other media, which pays a huge 9.33% dividend. Shutterstock (NYSE: SSTK) is a global creative platform that connects brands and businesses with high-quality content. Its platform brings together users and content contributors by providing readily searchable content that customers can license and by compensating contributors for their content as it is licensed.
Contributors upload their content to the Company’s Web properties in exchange for royalty payments based on customer download activity. It offers licenses to metadata associated with the Company’s images, footage, music tracks, and 3D models through the Company’s data, distribution, and advertising services from the Company’s Giphy business, which consists of graphics interchange format (GIF) visuals.
Shutterstock also offers specialized solutions for content matched with production tools and services through Shutterstock Studios. Its content offering includes images consisting of photographs, vectors, and illustrations, and footage consisting of video clips and cinema-grade video effects.
Oxford Industries
With a rich 7.71% dividend and a host of well-known brands in their portfolio, this is an incredible buy now. Oxford Industries (NYSE: OXM) owns and markets these lifestyle brands:
- Tommy Bahama,
- Lilly Pulitzer,
- Johnny Was,
- Southern Tide,
- The Beaufort Bonnet Company,
- Duck Head, and
- Jack Rogers.
It distributes its products through its direct-to-consumer channels, consisting of its brand-specific full-price retail stores, e-commerce Websites and outlet stores, and its wholesale distribution channel, which includes sales to various specialty stores, signature stores, department stores, multi-branded e-commerce Websites and other retailers.
Additionally, it operates Tommy Bahama food and beverage locations, including Marlin Bars and full-service restaurants, generally adjacent to a Tommy Bahama full-price retail store. Tommy Bahama designs, sources, markets, and distributes men’s and women’s sportswear and related products. Lilly Pulitzer designs, sources, markets, and distributes upscale collections of women’s and girls’ dresses, sportswear, and related products.
Universal Corporation
This somewhat off-the-radar company is another one of the world’s leading tobacco merchants, and operates as a global tobacco leaf supplier rather than a cigarette manufacturer. Universal has reported strong demand, has been in business for almost 150 years, pays a 6.16% dividend, and is a Dividend King. The Dividend Kings are companies that have raised their dividends for 50 years or more. Universal (NYSE: UVV) processes and supplies leaf tobacco and plant-based ingredients worldwide.
The company operates through two segments:
- Tobacco Operations
- Ingredients Operations
It procures, finances, processes, packs, stores, and ships leaf tobacco for sale to manufacturers of consumer tobacco products.
The company:
- Contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos that are primarily used in the manufacture of cigarettes
- Dark air-cured tobaccos manufacture naturally wrapped cigars, cigarillos, and smokeless and pipe tobacco products
Universal Corporation also provides value-added services, including:
- Blending, chemical, and physical tobacco testing
- Service cutting for various manufacturers
- Manufacturing reconstituted leaf tobacco
- Just-in-time inventory management services
- Electronic nicotine delivery systems
- Customer smoke testing services
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