Under-$20 Dividend Stocks for Passive Investors

The S&P/TSX Composite Index is still in record territory on November 19, 2021, despite skidding in the last three trading …

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The S&P/TSX Composite Index is still in record territory on November 19, 2021, despite skidding in the last three trading sessions. Some market observers said the new COVID lockdowns in Europe had unsettled Canada’s primary equities benchmarks. However, Chief Investment Officer Greg Taylor of Purpose Investments said people cashed in from resource stocks and somehow caused the index’s decline.

Nevertheless, countless dividend stocks trade at less than $20 per share but offer generous payouts. Now is the perfect time to scoop up shares of Aecon Group (TSX:ARE), Sienna Senior Living (TSX:SIA), or Acadian Timber (TSX:ADN). Their yields range from 4% to more than 6.25% if you need recurring passive income.

Multi-year projects

Aecon is well-known in Canada for its dynamic and landmark projects. The $1.03 billion company is an icon in the country’s construction industry. It was founded in 1877 and has since provided construction and infrastructure development services to the private and public sectors.

Besides the home country, Aecon has clients in the United States and internationally. After three quarters in 2021, operating profit ($9.5 million) is back following a $3 million operating loss in the same period in 2020. Total revenue grew by 12.1% year over year.

Management expects continuous growth in recurring revenue, especially in the utility sector. However, there should be multi-year projects in the civil, industrial, nuclear, and urban transportation sectors due to the steady demand for Aecon’s services. The share price is $16.94%, while the dividend yield is 4.13%.

Improving operating environment

Sienna Senior Living is a pure dividend play. The healthcare stock trades at only $15.01 but pays a hefty 6.24% dividend. Interestingly, current investors are up 11.26% year to date following a challenging COVID year. The pandemic had severely affected the operations of this prominent provider of senior living and long-term care (LTC) services in Canada.

While total revenue after three quarters in 2021 is relatively flat compared to the same period in 2020, management reported a net income of $15.99 million. It lost $15.75 million as of September 30, 2020. Sienna’s President and CEO, Nitin Jain, said, “Our strong third-quarter operating results and occupancy growth support our general optimism for Sienna’s path forward.”

Moreover, the operating environment is continually strengthening, as evidenced by the strong occupancy gains. In Q3 2021, the average occupancy rates in the retirement and LTC segments are now 82.1% and 86.2%, respectively.

Regaining strength

Acadian Timber maintains a positive outlook for the remainder of 2021. The $303.03 million company is a supplier of primary forest products to clients in Eastern Canada and the Northeastern United States. According to its CFO, Susan Wood, the business strategy for years is to maximize cash flows from existing timberland assets.

Thus far, this year, there’s a steady, strong, and stable demand for softwood logwoods, hardwood sawlogs, and biomass. In the nine months ended September 25, 2021, overall sales volume declined 11.6% versus the same period in 2020. However, net income soared 74.5% to $11.8 million.

Notably, free cash flow increased 20.5% to $11.45 million. At only $18.16 per share, you can partake of Acadian’s lucrative 6.39% dividend.

Value for money

The landscape remains conducive to investing, especially for passive investors. Aecon, Sienna Senior Living, and Acadian Timber offer real value for money at under $20.

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. The Motley Fool owns shares of and recommends ACADIAN TIMBER CORP.

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