People mistake the stock market as a popularity contest sometimes. The father of value investing, Benjamin Graham, once said that the markets act like a voting machine in the short run. Often, sentiment is the basis for valuating companies, not fundamentals.
The same thing applies to dividend stocks. Blue-chip stocks are the more popular ones because they are matured companies. However, other dividend payers fly under the radar or are low-key. Investors can take the extra mile to find outstanding income stocks that could make you rich too.
Yield-hungry investors can check out Fiera Capital (TSX: FSZ) or Aura Minerals (TSX: ORA). The companies pay an average dividend yield of 7.69%. Any investment amount could double in less than 10 years.
Investment manager
Fiera Capital is an independent asset management firm and is one of Canada’s leading investment managers. The company caters to institutional, financial intermediary and private wealth clients. It operates in North America, Europe, and selected Asian markets (17 locations total) and offers customized multi-asset solutions.
As of year-end 2020, the assets under management (AUM) are around $180.2 billion. Fiera Capital was formed in 2002 and started with only $5 billion initial AUM. By October 2005, the AUM doubled to $10 billion. Management was building a strong growth platform.
Shortly after that, in February 2006, Fiera’s client base broadened ($26 billion AUB) following the acquisition of YMG Capital. In September 2020, the stock made its debut on the TSX. The dividend stock isn’t a top performer in 2021, with its 1.55% year-to-date gain. However, at $10.62 per share, the dividend yield is a mouth-watering 7.89%. The yield is attractive if you’re building your nest egg in retirement.
Mid-tier gold and copper producer
The shares of Aura Minerals have returned 1,015.19% (122.76% CAGR) in the last three years. So far, in 2021, the gain is only 4.17%. You can purchase the stock for $14.36 to partake of the 7.5% dividend. Again, the yield is attractive to income investors.
Aura Minerals is a multi-national mining company with a market capitalization of $1.02 billion. It engages in the development and operation of gold and base metal projects. The mines it operates in Brazil, Honduras, and Mexico produce gold and copper. Today, it’s a mid-tier company in the mining industry.
The company achieved a milestone in Q4 2020. Its 68,964 gold equivalent ounces (GEO) production during the quarter was a record high. It was 29% higher than the GEO in Q4 2019. Aura Minerals President and CEO Rodrigo Barbosa also notes the 20% production growth versus Q3 2020.
After the COVID-19 year (ended December 31, 2020), Aura Minerals’ balance sheet is solid, with about US$118 million in cash. With its financial position, management said it could fully fund the company’s ambitious growth plan. The target is to achieve over 400,000 ounces of annual gold production by 2024. Similarly, Aura should continue to generate robust cash flows from operations.
Weighing machine
The late economist Benjamin Graham adds that the market becomes a weighing machine in the long run. Stock market investors tend to purchase securities in the short run as if it were a popularity contest. Thus, long-term investors should avoid short-term popularity contests or noise. If you did, you might miss out on excellent income stocks like Fiera Capital and Aura Minerals. Both stocks could be your ticket to riches.
