3 Small-Cap Dividend Stocks Under $50 With Big Potential

In the current market climate, investors are increasingly shifting to defensive strategies. As investors navigate the turbulent waters of tariff-driven volatility in 2025, dividend stocks have emerged as a safe harbor, delivering superior returns compared to the broader market. While the default strategy might be to anchor portfolios with blue-chip payers like Coca-Cola (NYSE: KO) and Johnson & Johnson (NYSE: JNJ), smart money might also look to small-cap stocks. These smaller companies, typically with market caps under $2 billion, often possess untapped potential and the capacity for substantial upside due to their lower starting valuations.

Our research has uncovered three intriguing small-cap dividend stocks, all trading below $50 per share, that appear poised for potential future appreciation. It’s true that small-cap investments come with elevated risk, but the potential rewards can be equally substantial. While we lack a crystal ball, these selected companies have demonstrated promising performance and attractive dividend yields. We acknowledge that some of these selections may have grown slightly beyond the conventional $2 billion small-cap threshold; however, their continued presence in prominent small-cap ETFs confirms their relevance to this segment.

Kodiak Gas Services (NYSE: KGS)

There are a couple of reasons to like Kodiak Gas Services (NYSE: KGS) stock. At $36 per share, Kodiak offers a high dividend yield of 5.1%. Given its market capitalization of $3.1 billion, Kodiak is in the gray area for small-cap stocks but is included in Fidelity’s Small Cap Dividend Growth Fund. In Q2 2025, Kodiak announced an increase to its quarterly cash dividend to $0.45 per share, up 10% compared with Q4 2024 levels.

If you were to purchase 100 shares of KGS stock at current levels and hold it for 10 years with DRIP, based on the latest performance, you could expect a total return of 57.3% as well as annual dividend income of $256.19. 

Over the past 12 months, Kodiak stock is up approximately 38.4%, though it continues to trade below its 52-week high of $50 per share. In its most recent quarterly results, Kodiak lifted the range of its full-year adjusted EBITDA guidance in response to what management described as an “outstanding quarter.” With these positive catalysts, the stock could revisit recent highs sooner rather than later.

Wall Street analysts are increasingly optimistic about Kodiak stock. Most recently, Stifel increased its price target on the stock by $1 to $46 per share with a “buy” rating attached. The analyst firm said that despite an uncertain macroeconomic backdrop, Kodiak is full speed ahead in the Permian basin, where it compresses natural gas for pipeline transportation.

Buckle (NYSE: BKE) 

With a dividend yield of 3.2%, specialty retailer Buckle (NYSE: BKE) makes a quarterly distribution of $0.35 per share. The stock currently trades for approximately $42 per share, in the midpoint of its 52-week range. Wall Street analysts mostly advise holding the stock, with an average price target of $40 per share. The markets may be underappreciating BKE stock considering the company’s strong balance sheet. Buckle carries zero long-term debt.

By purchasing 100 shares of BKE at current levels, and holding for 10 years with DRIP, you could expect annual dividend income of just over $191 and more than just a preservation of capital.

Buckle recently reported a 6.1% jump in its same-store sales for the four-week period leading up to early May and has also been experiencing an increase in online sales. The company’s net sales in the same period increased 7% to $85.5 million. This performance is a shift from a tough 2024 in which revenues were on a downward trajectory.

For example, in the first three quarters of 2024, Buckle suffered a 5% decline in revenues. But 2025 is off to a good start. In Q1, Buckle reported net income of $35.2 million, or $0.70 per share. Buckle competes with the likes of Target and Amazon but still manages an attractive profit margin of nearly 16%. If Buckle can keep up this performance, it might have further upside potential and could be worth a spot in a dividend investor’s portfolio. 

Farmers National (Nasdaq: FMNB)

Canfield, Ohio-based Farmers National (Nasdaq: FMNB) stock trades for just over $13 per share. The company has a dividend yield of 5.1%. In May 2025, Farmers National recently declared its latest quarterly dividend of $0.17 per share. Wall Street has an average price target of $15 on Farmers National stock, reflecting upside potential of approximately 13%. FMNB stock is held by big institutions including BlackRock, Vanguard LSV Asset Management. With a purchase of 100 shares at current levels, and holding for 10 years with DRIP, you could expect annual dividend income of just over $111 and a total return of roughly 66% over that period.

In Q1 2025, Farmers National reported net income of $13.6 million compared with $11.2 million year-over-year. Farmers National CEO Kevin Helmick described the bank’s “position of strength,” pointing to a “legacy of profitability, strong asset quality and robust liquidity levels” despite economic uncertainty. Farmers has growing customer deposits and has been expanding its footprint into new markets, the most recent of which was Columbus, Ohio. Investors who might want exposure to financial services might want to consider Farmers National for its steady dividend and potential for capital appreciation. 

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