Canadians don’t need a huge capital to start investing in stocks. You just need to have the appetite to invest. Many newbie investors start small when testing the waters; then they accumulate more shares when the money is growing.
On the TSX, $25 in seed money is enough. You can buy simple stocks like Pizza Pizza Royalty (TSX: PZA), Bird Construction (TSX: BDT), or Evertz Technologies (TSX: ET). All three pay dividends, but the share prices are relatively cheap compared with other renowned dividend payers. More importantly, the nature of the businesses is not hard to understand.
Thriving system sales
Pizza Pizza is a $427.63 million corporation that owns (indirectly) the rights and trademarks to Pizza Pizza and Pizza 73. The revenue streams come from restaurants in the royalty pool. Interestingly, this resto stock outperforms the broader market year to date at +14.56% versus -7.55%. It trades at $13.29 per share and pays a 6.09% dividend.
The earnings results for the second quarter (Q2) 2022 are coming out this week, and they should be better than the previous results. In Q1 2022, system sales increased 13.6% versus the same quarter in 2021. Paul Goddard, chief executive officer (CEO) of Pizza Pizza, credits the strong first-quarter results to the strong value of the brands, pick-up & delivery business, increased walk-in traffic, and reopening of key non-traditional stores.
The dividend frequency of Pizza Pizza is 12 and not the usual four. Because the payouts are every month, you can include the dividends in your monthly budget. In late June 2022, management increased its monthly dividend by 3.8%.
Resilient organization
Bird Construction has underperformed so far in this year (-26.45%), although the business is doing good. In Q1 2022, the $377.47 million construction company reported revenue growth of 6.9% ($30.6 million) versus Q1 2021. Management continues to build a resilient organization and create growth opportunities through collaboration, cross-selling, and diversification.
Teri McKibbon, president and CEO of Bird Construction, said, “We delivered a solid first quarter in 2022, growing our year-over-year revenue and Backlog to new records despite early headwinds from pandemic-related personnel and supply chain challenges, as well as weather-related delays.”
The stock is far from mediocre, considering the 57.6% (16.31% compound annual growth rate) total return in 3.01 years. If you invest today ($7.03 per share), the dividend yield is an eye-popping 5.55%.
Rare tech gem
Evertz Technologies is a rare gem and a top performer in the beaten-down technology sector. It pays a hefty 5.1% dividend. Current investors are ahead with a 10.10% year-to-date gain ($11.14 per share), while the technology sector is losing by 30.52%.
The $1.07 billion company is the leader in Software Defined Video Network (SDVN) technology. In fiscal 2022 (12 month ended April 30, 2022), revenue, net earnings, and earnings from operations increased 29%, 73.2%, and 75% versus fiscal 2021.
Content creators, broadcasters, specialty channels, and television service providers form the customer base of Evertz Technologies. Its video and audio infrastructure solutions are widely used in the television, telecommunications and new-media industries. Expect the company to thrive in a complex digital environment.
Recurring passive income
Pizza Pizza, Bird Construction, and Evertz Technologies are simple stocks, yet investors with limited capital can earn recurring passive-income streams.
