Dividend investing is a smart strategy to earn passive income without lifting a finger. Many people prefer top-value or established companies because of their reliable payouts. However, some dividend payers with solid growth prospects are excellent options for dividend earners and growth investors.
Trican Well Service Ltd. (TSX: TCW), Peyto Exploration & Development Corp. (TSX: PEY), and Open Text Corporation (TSX: OTEX) fly under the radar but deserve serious consideration for their visible growth runways. All three also have market-beating returns amid a challenging environment.
High-flyer
Trican Well continues to fly high, making it a top pick in Q4 2023. The $961.3 million company provides oil and natural gas well servicing equipment and solutions through the drilling, completion, and production cycles. At only $4.54 per share, current shareholders delight in the 28.2% year-to-date gain on top of the 2.64% dividend yield.
In the first half of 2023, revenue increased 25.2% year over year to $465.3 million. Notably, profit and free cash flow soared 277.7% and 104.9%, respectively, to $55.9 million and $92.2 million from a year ago. Because of the solid financial results, Trican instituted a quarterly dividend program in 2023.
The company has the financial flexibility to pursue growth initiatives because of its strong balance sheet and positive working capital ($127.8 million) after the first six months. Trican boasts the newest, most technologically advanced fleet of fracturing equipment in Canada. It deployed the first next-gen fracturing fleets last year.
Rising from obscurity
Peyto Exploration & Development Corp. was an obscure name in the energy sector until it reported record profit and cash flow in 2022. Its free funds flow tripled in the same year. If you invest today, the share price is $13.70 (+7.26% year to date), while the dividend yield is a lucrative 9.64%. The payout is monthly, not quarterly.
The $2.4 billion company is a low-cost operator and Canada’s fifth-largest gas producer. Peyto operates in the Alberta Deep Basin, producing oil, natural gas and natural gas liquids (NGLs). Business growth is on the horizon following a strategic acquisition.
Peyto bought the Canadian assets of Repsol for $636 million. The deal includes all mining rights, facilities, and infrastructure related to the oil and gas exploration and production operations of the Spanish oil and gas company in Canada. Peyto now has a vast interconnected gas gathering system that allows for future flexibility and optimization capabilities. There’s also future potential for increasing dividends.
Set to explode
Dividend stocks in a growth sector like technology are rare gems. Open Text belongs to this rare breed of Canadian tech firms. At $48.26 per share (+22.6% year to date), you can partake in the 2.81% dividend. The $13.1 billion company is the leading provider of information management solutions.
Many industry experts expect this tech stock to explode because of market-changing technology such as artificial intelligence (AI). Open Text recently formed partnerships with Google Cloud and Deloitte. The ecosystem partners aim to drive digital and AI-led innovations in various sectors, including high-tech, financial services, healthcare, insurance, and utilities.
Earn two ways
The technology and energy sectors are holding ground despite the strong headwinds to start Q4 2023. Trican Well, Peyto, and Open Text are notable picks for people who want a considerable windfall from capital gains and sustained dividend earnings.
