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 …

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Should you invest $1,000 in Acadian Timber Corp. right now?

Before you buy stock in Acadian Timber Corp., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Acadian Timber Corp. wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $19,624.59!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 34 percentage points since 2013*.

See the Top Stocks * Returns as of 11/20/24

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.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Dividend Stocks

money goes up and down in balance
Dividend Stocks

This 6% Dividend Stock Is My Top Pick for Immediate Income

This Canadian stock has resilient business model, solid dividend payment and growth history, and a well-protected yield of over 6%.

Read more »

ways to boost income
Dividend Stocks

1 Excellent TSX Dividend Stock, Down 25%, to Buy and Hold for the Long Term

Down 25% from all-time highs, Tourmaline Oil is a TSX dividend stock that offers you a tasty yield of 5%…

Read more »

Start line on the highway
Dividend Stocks

1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades

CN Rail (TSX:CNR) stock is incredibly cheap, but should investors join insiders by buying the dip?

Read more »

bulb idea thinking
Dividend Stocks

Down 13%, This Magnificent Dividend Stock Is a Screaming Buy

Sometimes, a moderately discounted, safe dividend stock is better than heavily discounted stock, offering an unsustainably high yield.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $15,000 in This Dividend Stock, Create $5,710.08 in Passive Income

This dividend stock is the perfect option if you're an investor looking for growth, as well as passive income through…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

3 Compelling Reasons to Delay Taking CPP Benefits Until Age 70

You don't need to take CPP early if you are receiving large dividend payments from Fortis Inc (TSX:FTS) stock.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Better Dividend Stock: TC Energy vs. Enbridge

TC Energy and Enbridge have enjoyed big rallies in 2024. Is one stock still cheap?

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »