Yes, today we’re going to look at an absurdly high dividend yield from one dividend stock. But to be clear, I would not recommend a company if I didn’t think there was a future for it. So before you go in hoping you’ll bring in passive income and ditch it, know that this isn’t what builds long-term wealth.
Instead, investing and reinvesting can be the biggest win for investors. Sure, you could go in and sink a large amount of income into a stock. But that would be a poor choice. Instead, drip feeding into a company can be far less volatile, and far more lucrative in the long run.
Today, we’re going to look at Fiera Capital (TSX:FSZ) and its 11.5% dividend yield to show you how to build that passive income now, and for years to come.
Why Fiera stock?
There’s more to this stock than its dividend. Though it’s true it’s a dividend stock with one of the highest dividend yields on the market right now. Yet the thing is, Fiera stock is down mainly because of market conditions.
The company is in the financial sector, investing in growth and value companies and providing asset management services as well. Of course with rising interest rates and inflation, financial stocks and companies in general don’t do as well. We’ve seen this in terms of Fiera stock before, and it could indeed sink lower.
Look to the Great Recession and you’ll see what I mean. Shares fell 65% during that time. While we’re headed for a mild recession, Fiera stock could fall once more to dramatic levels. Perhaps not by 65%, but certainly in the double digits. It’s already down 27% in the last year and 15% year to date.
So why buy it?
Again, look to the past. After hitting those lows in 2009, shares climbed higher and higher. By 2013, FSZ had surpassed previous highs, a climb of 200%! Even now, shares are up 74% since those lows.
So as you can see, Fiera stock may fall, but it could also climb back up. And this should happen much sooner than during the Great Recession. There has been a slow fall, and there will likely be a faster climb as stocks rebound. Especially for dividend stock Fiera.
Fiera stock narrowly missed its latest earnings report, yet shares continued to drop further. However, management pointed out that adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) remained stable throughout 2022. So while shares may drop further in 2023, they should come back fairly strong by the end of 2023.
Bottom line
Not only has Fiera stock shown that it can retain a stable balance sheet during trying periods, it can maintain its dividend. Management recently stated its dividend would remain at $0.86 per share on an annual basis. That comes to an 11.5% dividend yield as of writing.
How much could you earn right now? You can see what a $10,000 could bring in with the chart below.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| FSZ | $7.51 | 1,332 | $0.86 | $1,145.52 | quarterly |
Yet remember, while that’s great news right now, long term is what you want. You could see your shares double, but with volatility coming I would recommend drip feeding. You could still invest $10,000, but over the year rather than all at once. This will bring down risk, and still help you achieve major passive income from this dividend stock.
