With the inventory market performing fairly effectively in latest months, I’ve more and more been trying more durable to seek out the shares I need to add to my portfolio. And when shares go up, dividend yields usually fall as the connection is inverse.

One small-cap inventory that caught my eye is Card Manufacturing facility (LSE:CARD). It’s not probably the most thrilling firm on the planet, and even within the UK, but it surely might be an thrilling inventory. The corporate’s valuation multiples are very low and the dividend yield is high tier.

What the numbers inform us

Card Manufacturing facility’s valuation profile is engaging in comparison with the broader retail sector. Web revenue is forecast to climb from a forecast £52.9m in 2026 to £56.4m in 2027 and £60.5m in 2028.

This development is mirrored in a steadily declining price-to-earnings (P/E) ratio. The P/E is forecast at 6.2 instances for 2026, 5.6 instances for 2027, and simply 5.2 instances for 2028. These figures are effectively under the UK retail sector’s historic averages, suggesting the market is undervaluing Card Manufacturing facility’s constant earnings supply.

Dividends are set to extend in tandem with income. The dividend per share is projected to rise from 5.7p in 2026 to six.3p in 2027 and 6.7p in 2028, providing potential dividend yields of 6%, 6.7%, and seven.2% at present share costs.

The dividend payout ratio stays conservative, transferring from 37% in 2026 to 38% in 2028, indicating that dividends are comfortably lined by earnings and leaving room for additional will increase or reinvestment.

The steadiness sheet can be enhancing however stays one of many few areas of concern. Web debt is forecast to fall from £117m in 2026 to £108m in 2027, and additional to £78 m by 2028. These figures might differ from Card Manufacturing facility’s personal reporting, doubtlessly resulting from lease liabilities. Card Manufacturing facility itself reported solely £58.6m in web debt in January 2025.

Doubtlessly missed

Card Manufacturing facility could also be missed by buyers regardless of its sturdy operational efficiency and market management. The corporate has constantly outperformed a sluggish celebrations market, rising basket spend and increasing its retailer footprint. Nonetheless, its shares haven’t at all times responded positively to strong outcomes. 

A part of this disconnect could also be because of the broader notion of the greeting card sector as low-growth. The bodily card market is increasing at simply 0%–1% yearly and clients stay price-sensitive. Moreover, Card Manufacturing facility’s value-led proposition and deal with inexpensive merchandise can result in it being pigeonholed as a defensive, fairly than a development, inventory.

Nonetheless, clearly analysts see some potential right here. There are presently seven analysts overlaying the inventory with six Purchase scores and one Maintain. The common share price goal is a whopping 73% above the present share price.

It’s definitely price contemplating, and I’m going to take an excellent have a look at the inventory. It’s nice on paper, I simply surprise the way it can cease being missed by buyers. It might take a stable earnings beat.