Traders searching for dependable passive earnings usually concentrate on huge FTSE 100 firms. A few of these giants can definitely be a great supply of dividends. However the UK market’s additionally house to numerous smaller firms with a robust popularity for earnings.

Right here, I’ll spotlight three small-caps providing dividend yields of 6% or extra – together with two shares from my very own portfolio.

A restoration story?

Epwin (LSE: EPWN) produces housebuilding merchandise equivalent to doorways, home windows, cladding and decking. The final couple of years have been robust, on account of slower circumstances throughout the UK’s housing market. Fortuitously, Epwin has remained worthwhile and in good monetary well being by way of this era, just lately reporting elevated annual income.

The danger is that circumstances might stay weak and even worsen if the UK suffers a recession. Nevertheless, I believe the image could possibly be enhancing. Latest authorities information confirmed a 17% enhance in shipments from UK brick factories through the first quarter of this 12 months.

Builders might order bricks for a brand new house earlier than they order doorways and home windows. But when extra bricks are being offered, I reckon there’s a great likelihood that extra doorways and home windows can be wanted over the subsequent 12 months.

Epwin at the moment trades on eight instances forecast earnings, with a 6% dividend yield. I reckon that’s price contemplating.

A distinct segment enterprise yielding 8%

Foreign money administration knowledgeable File (LSE: REC) isn’t a family title. A few of its largest prospects are Swiss pension funds. In complete, the corporate’s prospects belief it to offer foreign money hedging and associated providers for greater than $100bn of underlying investments.

We are able to get an concept of the worth hooked up to its providers by its accounts. Final 12 months, File reported a 27% working margin, producing a return on fairness of greater than 30%. These wonderful figures are pretty typical for this enterprise.

When an organization can constantly generate this type of profitability, my expertise is that it normally presents a service its prospects worth extremely.

Maybe the primary danger is that historic development has usually been gradual and inconsistent. Latest efficiency has improved, however there’s no assure it will proceed. Nevertheless, File’s 8% dividend yield seems protected to me. It’s additionally excessive sufficient for me to be relaxed concerning the danger of gradual development.

A 9.9% yield!

Sabre Insurance coverage (LSE: SBRE) is a distinct segment operator within the UK motor insurance coverage market, specializing in higher-risk drivers and strains equivalent to bike and taxi insurance coverage.

The benefit of this mannequin is that Sabre’s much less uncovered to competitors from price comparability and huge manufacturers. The agency’s prospects require extra expert underwriting, however revenue margins are larger to replicate the additional danger.

As a possible investor, my major concern is that the corporate’s core market is comparatively small. One space at the moment being focused for development is to supply cheaper insurance coverage to much less dangerous drivers, whereas additionally accepting barely decrease revenue margins. This might work effectively – however there’s much more competitors on this space, so cautious judgement can be wanted.

Dealer forecasts for 2025 present Sabre with a dividend yield of 9.9%, lined by earnings. This enterprise seems attention-grabbing to me and is on my record for additional research. I believe it could possibly be price contemplating for passive earnings.