Some people believe you can only get rich if you have sizeable money to invest. Canadians sitting on $1,000 could start small and make a fortune through dividend investing. Timbercreek Financial (TSX:TF), MCAN Mortgage Corp. (TSX:MKP), and Fiera Capital (TSX:FSZ) are a trio of generous income stocks.
The companies pay no less than 7.5% in dividends. Why spend your $1,000 on frivolous things when you can earn $75 per year from it? Your capital remains intact in 10 years and compounds 206% to $2,061.30.
Structured financing solutions
Timbercreek Financial is a mortgage investment company. It’s a non-bank lender that provides structured financing solutions not typically available from Canadian banks and financial institutions. Commercial real estate investors are mostly their clients or borrowers. The current share price is $9.10, while the dividend offer is 7.57%.
This $736.9 million firm from Toronto, Canada, has direct investments in a diversified portfolio of high-quality structured mortgage loans. The security or collaterals from the loans are stable, income-producing commercial real estate, including multi-residential, office, and retail buildings in urban markets.
Timbercreek lends against income-producing real estate. The strategy ensures that borrowers have income from their properties to service or repay the loans. Also, it reduces the likelihood of default significantly. Besides implementing conservative loan-to-value ratios, the loan term is short or less than five years.
Lender and MIC
MCAN Mortgage Corporation is both a loan company and a mortgage investment corporation (MIC). It has a market capitalization of $439.34 million. The stock trades at $17.70 per share and pays a lucrative 7.68% dividend. XMC Mortgage Corporation, an originator of single-family residential mortgage products across Canada, owns MCAN 100%.
Management’s objective is to generate a reliable stream of income. MCAN invests in a diversified portfolio of Canadian mortgages that consists of single-family residential and residential construction. It also extends non-residential construction and commercial loans.
As a loan company, MCAN adheres to the guidelines and regulations by the Office of the Superintendent of Financial Institutions Canada (OSFI). As a mortgage investment corporation, MCAN follows the regulations and limits of the Income Tax Act. The company enjoys the perks of a MIC, like the deduction of dividends paid to shareholders from its taxable income.
Growing global presence
Fiera Capital is a $1.13 billion independent investment management firm. The current share price is $10.91, while the dividend yield is a mouth-watering 7.78%. Market analysts also see a potential 28.3% price gain to $14 in the next 12 months.
The company caters to the institutional, financial intermediary and private wealth clients in need of customized multi-asset solutions across public and private market asset classes. Fiera Capital operates in North America, Europe and key Asian markets, and its global presence is growing. As of year-end 2020, the assets under management (AUM) are $180.2 billion.
This research-driven investment firm is known for its broad spectrum of investment strategies. Fiera’s competitive advantage is its extensive experience in active and structured fixed income and Canadian and foreign equity. It also offers asset allocation and non-traditional investment solutions.
A creative way to build wealth
Dividend investing is a creative way if you want to get wildly wealthy over time. However, you can’t begin the journey unless you plant the seeds today to reap the harvest in the future.
Speaking of three stocks that could turn $1,000 into a fortune in the future...
Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
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 Christopher Liew has no position in any of the stocks mentioned.