When dividend-paying companies are undervalued, investors stand to gain a constant stream of dividend income on top of capital gains, as over time, the company market value move towards what it is intrinsically worth. If you’re a long term investor, these cheap dividend stocks can boost your portfolio value.

Kathmandu Holdings Limited (NZSE:KMD)

Kathmandu Holdings Limited, together with its subsidiaries, designs, markets, and retails clothing and equipment for travel and adventure in New Zealand, Australia, and the United Kingdom. Founded in 1987, and now led by CEO Xavier Simonet, the company now has 1,273 employees and with the stock’s market cap sitting at NZD NZ$444.77M, it comes under the small-cap stocks category.

Kathmandu Holdings has been paying dividend over the past 7 years. It currently paid an annual dividend of NZ$0.13, resulting in a dividend yield of 5.91%. In addition to KMD’s dividend yield surpassing New Zealand’s low risk savings rate of 3.00%, it also exceeds the best-in-class dividend payer average yield of 4.92%. The company’s payout ratio currently stands at 68.86%, indicating that net income properly covers dividend payments. KMD is also trading below its intrinsic value by 46.55%, making KMD an attractive investment at the current share price of NZ$2.20. More on Kathmandu Holdings here.

SKY Network Television Limited (NZSE:SKT)

SKY Network Television Limited provides multi-channel, pay television, and free-to-air television services in New Zealand. Founded in 2005, and currently run by John Fellet, the company size now stands at 1,192 people and with the stock’s market cap sitting at NZD NZ$933.94M, it comes under the small-cap group.

Over the past 10 years, SKY Network Television has been distributing dividends back to its shareholders, with a recent yield of 6.25%. Best dividend payers in New Zealand, on average, yield 4.92%. SKT exceeds this by 1.33%, and according to industry analysts, its future payout ratio should still allow this yield to hold. This is consistent with the growing dividend trend we’ve observed from SKT over time. In addition to this, SKT is also trading beneath its true value by 26.32%, making SKT an attractive investment at the current share price of NZ$2.40. More detail on SKY Network Television here.

Trustpower Limited (NZSE:TPW)

Trustpower Limited engages in the development, ownership, and operation of electricity generation facilities in Australia and New Zealand. Started in 1993, and currently lead by Vince Hawksworth, the company provides employment to 787 people and with the company’s market cap sitting at NZD NZ$1.62B, it falls under the small-cap stocks category.