4 High-Paying Dividend Stocks You Won’t Want to Miss Out on

Dividend investors wanting more passive income should consider adding four high-paying, small-cap stocks to their portfolios.

Christopher Liew, CFA

Christopher is a CFA Charterholder and a former financial advisor at RBC.

Published June 23, 2023 4:15 pm EDT

Savvy investors, especially dividend earners, will not limit their holdings to blue-chip or large-cap stocks. Some small-cap stocks with high yields can boost passive income and help cope with rising inflation.

Today, you won’t want to miss out on Canacol Energy (TSX: CNE), Evertz Technologies (TSX: ET), Yellow Pages Limited (TSX: Y), and Transcontinental (TSX: TCL.A).

Market-beating returns

The energy sector is on a slump in 2023 (-8.53% year to date), but not Canacol Energy. At $11.23 per share, the year-to-date gain is 17.27%, and you can partake in the eye-popping 9.02% dividend. This $382.9 million company operates in Colombia and is the country’s largest independent onshore conventional natural gas explorer and producer.

Canacol is crucial in Colombia’s transition to cleaner and more renewable energy. The government wants to phase out energy sources like oil and coal as it aims 51% reduction in greenhouse gas (GHG) emissions by 2030.

Management focuses on conventional natural gas because of consistently high and stable prices and low production costs. Both factors support cash flow predictability and stability.

The shift to a gas-focused firm, along with exploration drilling programs, enables Canacol to efficiently commercialize new gas reserves and boost sales. The low-cost, high margins also allow growing economies of scale.

Rare gem

Evertz Technologies is a rare gem, because only a few growth-oriented tech firms pay dividends. At $11.50 per share (-8.39% year to date), the dividend offer is 7.12%. The $876 million global technology company develops software and hardware products and services for clients in the broadcast and film industry.

In fiscal 2023 (12 months that ended April 30, 2023), Evertz posted a record revenue and backlog of $454.6 million and $392 million. However, the net earnings of $64.55 million were 11% lower than in fiscal 2022. Still, management looks forward to the industry’s departure from traditional broadcast hardware. Evertz is ready to deliver innovative virtualized solutions in the cloud for business growth.

Obscure dividend play

Yellow Pages fly under the radar, but it’s a good dividend play. The current share price and dividend yield are $12.63 (-4.76% year to date) and 6.45%. This $235.65 million company provides the most comprehensive digital and traditional marketing solutions.

The customer base, including small- and medium-sized enterprises (SMEs), can place online and mobile priority placement ads on Yellow Pages’s subsidiaries or digital media properties. In the first quarter of 2023, revenue and net income declined 7.5% and 15.3% year over year to $62.7 million and $12.38 million.

Nevertheless, the quarterly results indicate business stability amid a challenging environment. The board also modified its dividend policy and approved a 33.3% increase in quarterly dividends.

Long growth runway

Transcontinental is a no-brainer buy for its long growth runway. The $1.27 billion company’s diversified operations (flexible packaging, printing, and media) generate significant cash flows. Management’s long-term vision is to grow the Packaging segment through organic sales growth and acquisitions.

It will also optimize the Printing platform and capture growth opportunities in promising verticals. Transcontinental invested $15 million recently in its book printing platform to meet demand and double hardcover binding capacity. If you invest today, the share price is $14.64 (-1.01% year to date), while the dividend yield is 6.08%.