Octopus Investments: UK small-caps offer once-in-a-cycle opportunity

Higher potential dividend yields

The recovery currently being seen among smaller UK growth-oriented companies marks a once-in-a-cycle opportunity to invest with the potential for significant capital growth and higher dividends, said Octopus Investments' Chris McVey.

McVey, deputy head of Octopus Quoted Companies, made the assertion as Octopus Investments published its latest Dividend Barometer, which also suggested small and mid-cap indexes will offer higher potential dividend yields than the FTSE 100 by 2025. Over the ten years to 2025, total cash payments from FTSE 100 firms have risen by 17.3% compared to an increase of 68.4% among FTSE AIM companies. Meanwhile, the dividend yield of the FTSE Small Cap is expected to be above both the FTSE 250 and the FTSE 100 for 2025 at 4.33% versus 3.88% and 3.97% respectively. Global small-cap stocks re...