3 Under-$30 Stocks That Pay Over a 5% Dividend Yield

These three dividend stocks below $30 could boost your passive income.

| More on:
Senior couple at the lake having a picnic

Image source: Getty Images

Despite the signs of easing, inflation remains higher than the central bank’s guidance of 2%. With inflation lowering your buying power, you could invest in high-yielding dividend stocks to earn a stable passive income. Here are three TSX stocks that trade under $30 while offering an over 5% dividend yield.  


Telecommunication companies are excellent defensive stocks to have in your portfolio, as telecommunication services have become essential in this digitally connected world. Besides, the recurring revenue streams deliver stable and predictable cash flows. So, I have selected Telus (TSX:T) as my first pick.

The company utilized the low-interest rate environment to accelerate its growth strategy to expand its 5G and high-speed broadband infrastructure over the last decade. It currently offers 5G service to 85% of the country’s population, while the PureFiber network connects 3.1 million locations. Besides, the company is also expanding its health services, and agriculture and consumer goods services segments, which could continue to boost its financials in the coming years.

Supported by its solid cash flows, Telus has raised its dividend 25 times since 2011. With a quarterly dividend of $0.3761/share, its forward yield is at a juicy 6.04%. Further, the company’s management hopes to raise its dividend at an annualized rate of 7–10 % through 2025, thus making it an intriguing buy.

Northland Power

Northland Power (TSX:NPI) focuses on producing energy from renewable sources. It has an economic interest in facilities with a total power-producing capacity of 3.4 gigawatts. The company earns substantial revenue from long-term PPAs (power purchase agreements) with governments and blue-chip clients. The weighted average of these PPAs stands at over 14 years. So, its cash flows are stable and predictable irrespective of the macro environment, thus allowing it to reward its shareholders with healthy dividend payouts. With a monthly dividend of $0.10, its forward yield is at 5.54%.

Further, the company could benefit from the increased transition towards clean energy. Besides, it is looking at strengthening its offshore wind projects in Europe and Asia and onshore assets in North America and Europe. These developmental projects could increase its production capacity to 6 gigawatts by 2027, representing an annualized growth rate of 17%. Given its healthy growth prospects and a cheaper NTM (next 12 months) price-to-earnings multiple of 17.5, I am bullish on Northland Power.

Pizza Pizza Royalty

My final pick would be Pizza Pizza Royalty (TSX:PZA), which operates a highly franchised restaurant business. It collects royalties from its franchisees based on their sales, thus making its financials immune to rising commodity prices. Besides, the company has been growing its same-store sales at a healthier rate this year amid new menu launches and promotional activities. It also continued to expand its restaurant network, which drove its financials, thus allowing it to raise its monthly dividends three times this year.

PZA currently pays a monthly dividend of $0.07755/share, with its forward yield at 6.47%. Meanwhile, the company’s management expects to increase its restaurant count by 3–4% this year while renovating its old restaurants. Besides, its same-store sales could remain solid, given its value proposition and convenience. Further, PZA’s dividend payout ratio stands at 97%. The reserves could help in smoothening out its dividends as seasonal variations are inherent to the restaurant industry.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy

More on Dividend Stocks

Aircraft wing plane
Dividend Stocks

Is Bombardier Stock a Buy After Missing its Earnings Estimates?

After going past its earnings estimates, Bombardier stock looks like an excellent holding right now.

Read more »

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

RRSP Ready: 2 Stellar Stocks for Your Annual Contribution

Two high-yield stocks are ideal options if you plan to maximize your annual RRSP contribution limits and reduce taxable income.

Read more »

grow dividends
Dividend Stocks

3 Stocks That Could Be Easy Wealth Builders

Long-term investors would be wise to have these three Canadian stocks on their radar.

Read more »

question marks written reminders tickets
Dividend Stocks

Dividend Investors: Is BCE Stock a Buy Now?

BCE now offers a 7.9% dividend yield.

Read more »

edit Taxes CRA
Dividend Stocks

CRA Money: 2 More Days to Boost Your Tax Refund!

Dividend stocks like Toronto-Dominion Bank (TSX:TD) can be great RRSP holdings.

Read more »

grow money, wealth build
Dividend Stocks

3 TSX Dividend Stocks With Yields Above 7% (But Are They Safe?)

These three dividend stocks all have ultra-high yields, making them some of the best to buy if you're looking to…

Read more »

Light bulb with jester hat perched on top
Dividend Stocks

3 Canadian Dividend Stocks With Payouts That Are No Joke 

Here are three top Canadian dividend stocks long-term investors would be remiss to ignore, particularly at these current valuations.

Read more »

clock time
Dividend Stocks

Is it Too Late to Buy These 3 Brilliant Passive Income Stocks?         

TD Bank stock is just one of three stocks that are well positioned to continue to provide passive income for…

Read more »