3 Overlooked High-Yielding Dividend Stocks to Buy Right Now

When we talk about high-yielding stocks, energy and telecom giants pop up. Here are three high-yielding stocks you could consider buying.

| More on:

Image source: Getty Images

High yields are associated with high risk. Where there is a risk, the company’s size matters. Many a time, risk-averse investors prefer buying large-cap dividend stocks when they are trading near their low. Amidst these large-cap stocks, some small-cap, high-yielding dividend stocks often get overlooked. There is a higher risk with small caps. However, if you look through them carefully, you can lock in some astounding dividend yields that can build wealth. 

Three overlooked high-yielding dividend stocks to buy 

I will take you through three such stocks and why I consider them a good investment at their current price point. 

  • Fiera Capital (TSX:FSZ) – 12.75%
  • Timbercreek Financial (TSX:TF) – 9.08%
  • Cogeco Communications (TSX:CGO) – 6.5%

Fiera Capital

This $734.7 million market cap stock is an asset management company that moves in tandem with the stock market’s performance. It manages the money of others for a management fee. While investing in mutual funds is recommended, you can invest in the company running a mutual fund. Last year, its assets under management (AUM) did not increase much as investors have been putting a pause on their investments. Despite slower AUM growth, the company saw its revenue surge.

Though Fiera may not have a stellar record of dividend growth, it has regularly paid dividends since 2010 with no dividend cuts. A 12.75% yield is lucrative if you are expecting a bull market at the end of the year. Fiera Capital could see a surge in management fees and investment profits in a bull run. 

Timbercreek Financial stock

This short-term mortgage lender has built a strong model to give loans to commercial REITs on their income-generating assets. Timbercreek Financial often gets overlooked as it has a market cap of $632.5 million. However, this small-cap stock has maintained a stable dividend per share for the last eight years. It even withstood the 2020 pandemic crisis when many commercial REITs delayed payments. Right now, its loan originations have slowed as commercial REITs have paused their development until financial conditions improve. 

In March, the company paid a special dividend of $0.0575 as it had a stellar year in 2023 with interest rates at a decade high. A higher interest rate helped TF collect more interest. Any cut in interest rates will help TF increase its loan originations, thereby growing its revenue from processing fees. It has a dividend payout ratio of 83%, giving it flexibility to pay dividends even in tough times. 

While TF faces credit risk, it is working with borrowers to help them repay. A revival in the real estate market could ease the credit risk. If you are optimistic about commercial REITs, investing in TF can help you diversify across multiple properties and reduce the risk. And a 9% yield is a good bargain. 

Cogeco Communications stock

After looking at a 9-12% yield, a 6.5% yield might not look high. However, when you hear the dividend growth rate, you will know why I added it here. This $2.3 billion market cap company that provides telecom services to over 1.5 million customers has been growing its dividend by a whopping 10% every year for the last 11 years. If you buy this stock at $55.60, you can lock in a $3.40 annual dividend, which will grow again in November. Despite such high growth, the company is paying 33% of its free cash flow as dividends and using the remaining amount to expand its network. 

Looking at the fundamentals, the company can continue growing its dividends as it has ample free cash flow flexibility. If the company maintains its 10% dividend growth rate, your dividend per share could increase to $5 by November 2029, giving you a 9% yield. 

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 Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Fiera Capital. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Business success with growing, rising charts and businessman in background
Dividend Stocks

5 TSX Stocks With High Dividend Growth to Buy Now

These TSX stocks sport a high dividend growth rate and are known for consistently rewarding their shareholders with increased cash.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Canadian Blue-Chip Stocks: The Best of the Best for May 2024

These two blue-chip stocks are up in 2023, sure, but have seen even more growth in the last few decades.…

Read more »

Couple relaxing on a beach in front of a sunset
Dividend Stocks

Passive Income: How to Make $33 Per Month Tax-Free by Doing Nothing

Hold monthly paying dividend stocks such as Exchange Income in your TFSA to begin a tax-free stream of passive income…

Read more »

data analyze research
Dividend Stocks

Is Telus Stock a Buy on a Dip?

Telus is down more than 20% over the past year and now offers a great dividend yield.

Read more »

A plant grows from coins.
Dividend Stocks

2 Top Dividend-Growth Stocks to Buy in May

These two dividend stocks saw major growth after earnings that promised more was coming in the future. And now could…

Read more »

Dots over the earth connecting the world
Dividend Stocks

Best Stocks to Buy in May 2024: TSX Telecommunication Services Sector

The telecommunication services sector is currently going through an upheaval. It is a good time to buy these stocks.

Read more »

Dividend Stocks

Bulletproof Income: How to Earn Safe Dividends With Just $10,000

These Canadian dividend stocks have the potential to sustain and increase their payouts for years under all market conditions.

Read more »

warning or alert
Dividend Stocks

Attention, Cautious Investors: This Top Dividend King Just Climbed 7% and Can Keep Going

Fortis (TSX:FTS) stock is still down 10% in the last year but up 7% on strong earnings that demonstrate more…

Read more »