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Are dividends coming to small cap energy stocks?

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Investors searching for yield may soon find themselves buying shares in small cap energy producers, FirstEnergy Capital's president John Chambers tells BNN.

Chambers says there has been a growing trend in the energy sector to focus on paying out dividends in order to attract investors.

"Those [energy companies] companies that are larger and more liquid and generally paying a dividend…have found it much easier to raise money over the past year or so," he says. "And I think that theme is really trickling down into the smaller mid cap -- and even the mid cap -- companies.

He says that the search for yield means companies that in the past might have held on to their cash are now looking at dividends.

"Historically you might of been 30,000, 40,000 or 50,000 barrels per day [of production] before you would consider something like that. I think the size level has reduced dramatically so companies in the 15,000 to 25,000 thousand barrels a day are now considering instituting a dividend," he says.

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