For Income of $500 a Year, Invest $4,869 in This Dividend Stock Today

This dividend stock yields a whopping 10.11% as of writing, and it would only take under $5K to create $500 in passive income per year.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published December 24, 2022 10:00 am EST

| More on: FSZ

The new year is coming, but before it does, there is still time to get in on some crazy deals with the right dividend stock. I say “crazy,” because the prices are so low on strong companies that should bounce right back, even if we enter a recession in 2023, which does look likely.

Today, I’m going to recommend on investment that could really help during this volatile situation in the next year. But even better, it offers a strong long-term hold as well. If not just for returns, then certainly for passive income from dividends.

money cash dividends — Image source: Getty Images

Fiera Capital

The dividend stock I would recommend right now for investors looking for a great deal is Fiera Capital (TSX:FSZ). The dividend stock has long had a strong reputation from investing in growth and value stocks. It then builds up a beefy dividend that investors can consider.

Plus, the stock is in value territory at the moment. Fiera stock trades at 15.27 times earnings and 2.43 times book value. So, why aren’t investors buying the stock? It’s likely due to the types of companies it invests in. Those growth and small-cap stocks can be riskier, which makes it hard to consider when we’re about to enter a recession.

But I argue that you should consider it. Yes, shares are down 12.35% year to date. But in the last decade, Fiera stock has more than doubled, climbing 108% in that time as of writing. That brings in a compound annual growth rate (CAGR) of 7.61%! That’s definitely something to consider.

Dig into the dividends

As for its dividend, the dividend stock holds a whopping 10.11% yield as of writing! And it’s been no slouch either. During the last decade, the dividend has grown by a CAGR of 10.4%! Even during this downturn, not only has Fiera stock kept the dividend stable, but actually increased it back in August 2021.

Now, usually, if you’re going to create a lot of passive income, then you’re going to need to make a massive investment. If this was during all-time highs, almost double today’s share price at $8.38, then, sure, that may have been the case.

But today, it’s not.

Here’s how much you would need to purchase to bring in $500 each and every year.

COMPANY	RECENT PRICE	NUMBER OF SHARES	DIVIDEND	TOTAL PAYOUT	FREQUENCY
FSZ	$8.38	581	$0.86	$41.67	Monthly

Did you catch that? Fiera stock also provides monthly passive income. That would turn the $500 into $41.67 per month. This would also allow you to purchase more shares, if you so choose. And in total, you can bring in that $500 for just $4,869 as of writing!

Why reinvest?

Fiera stock is down, but don’t count it out. If you bring in that $500 and your shares do nothing, you’ll still turn that $4,869 into $5,369. But that scenario is unlikely. Fiera stock could soar back to 52-week highs. Should that happen, you’re looking at a portfolio worth $6,257, or $6,757 including those dividends!

Now is the time to buy up a cheap dividend stock with a strong history and look forward to passive income in the near term. But in the long term, you’ll create a revenue stream that can last a lifetime.