3 Top Under-$20 TSX Stocks to Buy With $1,000

$1,000 in capital is enough to buy up to three TSX stocks that offer generous dividends to income seekers.

| More on:
A close up image of Canadian $20 Dollar bills

Image source: Getty Images

Canadians with investment appetites but who are economizing have a wide selection of affordable TSX stocks. If you want to limit your cash outlay to $1,000, you can invest in Nexus (TSX:NXR.UN), Acadian Timber (TSX:ADN), or Pizza Pizza Royalty (TSX:PZA).

The three small-cap stocks trade under $20 but pay generous dividends. Besides the price and high yield, your choice could depend on whether you want exposure to real estate, construction, or fast-food sectors. Thus far, in 2021, all of them have positive gains.

Top draw

Nexus is the top draw among real estate stocks this year. The $694.26 real estate investment trust (REIT) outperforms the broader market at +73.65 versus +21.39%. It’s also one of TSX’s successful IPOs in 2021, following its graduation from TSXV in January.

Would-be investors get real value for money, because, at only $12.65 per share, the dividend yield is 5.16%. The competitive advantage of Nexus is that it’s growth oriented with a focus on industrial real estate properties. It benefits from the e-commerce boom and should continue to deliver superior returns to shareholders.

Kelly Hanczyk, CEO of Nexus, said, 2021 is a fantastic year for the REIT. Management expects to close the year with $663 worth of industrial acquisitions.

Leading timberland owner

Acadian Timber trades a little higher ($18.24 per share) but pays the highest dividend (6.36%) compared with Nexus and Pizza Pizza. This timberland owner has about 2.4 million acres of land under management, and the properties are in eastern Canada and the northeastern United States.

The $304.37 million company derives revenue from the sale of its core products (softwood lumber, hardwood sawlogs, and biomass). While sales volume after three quarters in 2021 increased by only 1.4% versus the same period in 2020, net income rose 74.5% to $11.8 million.

Adam Sheparski, Acadian Timber’s president and CEO, said, “Steady prices and strong demand for our sawlogs have enabled us to generate solid operating and financial performance for the third quarter.” For the rest of 2021, management expects demand for softwood, hardwood, and biomass to be strong and stable.

Slowly recovering

The global pandemic was harsh on the restaurant industry. Pizza Pizza Royalty owns and franchises quick-service restaurants under Canada’s Pizza Pizza and Pizza 73 brands. The walk-in sales and customer traffic in restaurants in the royalty pool decreased significantly beginning in March 2020.

Fortunately, things are turning around this year. In Q3 2021, total system sales and royalty income rose 2.6% and 2.3% versus Q3 2020. Pizza Pizza posted growth, despite the smaller number of restaurants, 725 as against 749 last year. Paul Goddard, Pizza Pizza Limited’s CEO, said, “We’re pleased with the strong sales growth in our largest markets.”

Notwithstanding the lingering effects of the pandemic, Pizza Pizza paid a total of $12.4 million in dividends during the quarter. The resto stock trades at $11.97 per share (+37.79% year to date), while the dividend is 6.02%. Lastly, the royalty corporation is one of the select few that pays monthly dividends.  

Pick one or all

Nexus, Acadian Timber, and Pizza Pizza are pure dividend plays for income seekers. You can purchase shares of one or all even with only $1,000, and the capital will compound over time if you keep reinvesting the dividends.

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 and PIZZA PIZZA ROYALTY CORP.

More on Dividend Stocks

Wireless technology
Dividend Stocks

5 Things to Know About Telus (TSX:T) Stock

Telus offers a diversified business model and steady dividend growth. Is it a buy in this market?

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

These 2 Canadian Dividend Stocks Are a Retiree’s Best Friend

Retirees can expect these companies to pay uninterrupted dividends and grow their payouts in the coming years.

Read more »

A stock price graph showing declines
Dividend Stocks

Here’s Why I’m Confident About Investing Through the Down Market

There is no bear market in history that has not been followed by a bull cycle. Rather than fret over…

Read more »

Business man on stock market financial trade indicator background.
Dividend Stocks

2 Undervalued Canadian Stocks Worth a Buy Right Now

Two Canadian stocks are strong buys right now because their current share prices are way below their true values.

Read more »

falling red arrow and lifting
Dividend Stocks

Why Bank of Nova Scotia (TSX:BNS) Stock Fell to Two-Year Lows Last Week

Should you buy BNS stock at such depressed levels?

Read more »

Caution, careful
Dividend Stocks

This Incredibly Common Mistake Can Come Back to Bite Dividend Investors

Are you thinking of buying dividend stocks? Keep these characteristics in mind!

Read more »

Man data analyze
Dividend Stocks

3 TSX Stocks to Buy Today and Hold Forever

The market pullback is giving investors a chance to buy great Canadian dividend stocks at cheap prices.

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Stocks for Beginners

3 TSX Stocks You’ll Wish You Bought at These Prices

Stocks are currently trading at unbelievable discounts. Here are three TSX stocks you’ll wish you had bought at these prices!

Read more »