Investing in high-yielding stocks often gets overlooked in favour of growth-focused strategies. Yet there’s something uniquely reassuring about steady income generation. One such stock that deserves attention is Fiera Capital (TSX: FSZ), a Canadian asset management firm that combines consistent dividends with a promising growth trajectory. While some may see small returns as unexciting, the truth is that with a solid high-yielding stock like Fiera, those returns can build a stable financial foundation.
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Fiera stock
Fiera Capital reported its Q3 2024 earnings recently, showing an 8.2% year-over-year increase in quarterly revenue, reaching $171.7 million. The dividend stock’s net earnings also grew to $12.6 million, compared to $11.1 million in the same period last year. These results highlight a trend of consistent financial performance, demonstrating Fiera’s ability to maintain stability even in uncertain markets.
Speaking of returns, let’s talk about dividends, the crown jewel of Fiera’s appeal. The dividend stock recently declared a quarterly dividend of $0.216 per share. This brings the annual dividend to $0.86 per share, translating to a robust 9.2% yield based on the current stock price. It’s rare to find yields of this magnitude, and even rarer to find them paired with a track record of consistent payments like Fiera’s.
But dividends alone don’t paint the full picture. Fiera Capital has also shown impressive stock performance over the past year. Its stock price has risen by over 90% in the last 52 weeks, thus reflecting growing market confidence in the dividend stock’s strategy and execution. This stock appreciation, combined with the high dividend yield, provides investors with a compelling total return that rivals many growth-focused investments. It’s the best of both worlds: income now and potential for capital growth later.
Future in focus
Looking ahead, Fiera Capital’s future appears bright. The dividend stock reported a 4% increase in assets under management (AUM) during Q3 2024, reaching $165.5 billion. This growth is driven by rising equity and fixed-income markets, as well as the company’s ability to attract new investment mandates. With a diversified portfolio spanning public and private markets globally, Fiera is well-positioned to weather market fluctuations and capitalize on opportunities in emerging asset classes.
From a financial perspective, Fiera manages its debt prudently, with a debt-to-equity ratio of approximately 2.6. While leverage is part of its growth strategy, the dividend stock maintains a balance between seizing opportunities and ensuring financial stability. This prudent management bolsters its ability to sustain dividends, even during economic downturns. Operating cash flow of $139.7 million over the trailing 12 months further underscores its financial resilience.
Critics might point to the company’s high payout ratio, which currently sits at 156%. While this is on the higher side, it’s important to note that Fiera has consistently managed to deliver on its dividend commitments, supported by its steady cash flow and growing revenues. The dividend stock’s historical ability to navigate challenging economic conditions and maintain shareholder returns should provide reassurance to cautious investors.
Bottom line
For those seeking reliable income, Fiera Capital stands as an example of how small, steady returns can compound into significant financial benefits over time. Its high yield, consistent financial performance, and promising growth initiatives make it a stock that punches above its weight in the Canadian dividend space. And with its proven track record, investors can have confidence in Fiera’s ability to deliver value well into the future.
In the end, investing isn’t always about chasing the next big thing. Sometimes, it’s about finding a stock that provides stability and a solid return, allowing you to sleep well at night. Fiera Capital embodies this principle, showing that small returns can be more than alright; they can be exceptional.
