Income Investors: This Stock Yields Over 6%

Are you an income investor looking for quality dividend-paying stocks? Consider Gluskin Sheff + Associates Inc. (TSX:GS) and its 6.22% dividend yield.

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Canada’s Big Six banks have always been good investments for income investors, but maybe you are looking for something different than Toronto-Dominion Bank or Royal Bank of Canada. If you want a financial firm that isn’t as well known, here is one for you to consider: Gluskin Sheff + Associates Inc. (TSX:GS).

Gluskin Sheff, founded in 1984 and headquartered in Toronto, is a wealth management firm that focuses on high-net-worth clients.

Gluskin Sheff by the numbers

Gluskin Sheff reported fourth-quarters earnings in September of $0.19 per share. This missed industry estimates of $0.21 per share, but it beat 2016’s fourth quarter by 72.73%. The stock boasts a net profit margin of 28.40%, which puts it among the more effective companies in its industry at turning a profit.

The company’s recent earnings history didn’t look quite as good. Over the previous three years, earnings declined by an average of 27.28% per year. It’s nice to see the stock back on the upswing in 2017.

Gluskin Sheff boasts an industry-leading return-on-equity number of 33.88%, so the company is currently doing a good job of taking investor money and creating profits from it.

The stock currently trades around the $16 per share mark, making it a far cheaper buy than any of the Big Six banks. Gluskin Sheff has a trailing P/E ratio of 11.58, so the stock’s earnings aren’t too expensive to buy.

A great dividend yield

The stock shines in its dividend offering. Gluskin Sheff currently pays a quarterly dividend of $0.25 per share for an annual payout rate of $1.00 per share. The dividend yield sits at 6.22% .

The company has paid at least one special cash dividend per year over the past five years that is over and above its quarterly offering — a nice bonus for investors. The payout has also steadily risen over the past five years. It’s always nice to see an increasing dividend.

Investor takeaway

While earnings were looking a little anemic in previous years, Gluskin Sheff is doing well this year. Combined with its stellar dividend payout, this is a stock worth considering for your Foolish portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Susan Portelance has no position in any stocks mentioned.

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