The rally powering the major averages this year has lifted small-cap stocks – and several also offer dividend income and the prospect for further gains. While the S&P 500 index is up more than 13% in 2026, the Russell 2000 has recorded a 23% advance. The small-cap benchmark touched a fresh record high on Friday.
The year has also favored quality stocks inside the small-cap universe. Consider the Pacer US Small Cap Cash Cows ETF (CALF), up nearly 27% this year and paying a current yield of 1.08%.
The fund, which also hit an all-time high Friday, includes the top 200 small-cap stocks with the highest free cash flow yield.
CNBC Pro used FactSet data to screen CALF for stocks that are well liked by analysts, offer upside relative to Wall Street price targets and pay a dividend.
The search turned up the following companies. Oil and natural gas play Ovintiv made the grade. Shares are up 62% in 2026, and the stock has a current dividend yield of 1.9%.
Second-quarter adjusted net income came in at $491 million, up 85% from the same period a year ago.
Finally, Upbound Group – parent of "rent to own" company Rent-A-Center – sported the highest current dividend yield on the screen, at 8%. The stock has rallied almost 11% in 2026, and more than 15% on a total return basis, including reinvested dividends.
