When it comes to dividend investing, finding a dividend stock that not only offers a high yield but also pays out consistently can feel like striking gold. Fiera Capital (TSX:FSZ) is one of those rare gems on the TSX. With a dividend yield sitting at a hefty 13.7% as of writing and reliable quarterly payments, this dividend stock is attracting attention from income investors across the country. If you’re building a Tax-Free Savings Account (TFSA) portfolio focused on passive income, this is a name worth knowing.
About FSZ
Fiera Capital is an independent asset management firm headquartered in Montreal. It manages more than $150 billion in assets for institutional and private wealth clients globally. While it’s not a household name like some of the big banks, it plays an essential role in Canada’s financial ecosystem. The dividend stock’s steady expansion into the United States, Europe, and Asia is part of its broader strategy to diversify revenue and capture growth outside of Canada. And so far, it seems to be working.
Let’s talk about the juicy part: dividends. Fiera Capital pays $0.216 per share every quarter, which adds up to around $0.864 per share each year. That works out to a dividend yield of about 13.7% based on a recent share price of about $6.50. While many dividend stocks pay quarterly, this kind of yield is rare, especially for a company that’s still actively growing. The latest dividend was paid on April 10, and the next one is expected in June. It’s consistent, and in the world of dividends, consistency is king.
Can it continue?
Now, before getting carried away by the double-digit yield, it’s important to ask: can this payout be maintained? One way to answer that is by looking at Fiera’s dividend payout ratio. Right now, it’s hovering around 374%, which means more than all of the company’s earnings are going straight into shareholders’ pockets. That’s great in good times, but it leaves little wiggle room during a downturn. If earnings drop, so might the dividend. This doesn’t mean it’s an automatic red flag, but it does call for a bit of caution.
Fiera’s latest financial results, for the fourth quarter of 2024, were mixed. The dividend stock posted revenue of $168.1 million, which was up 7.2% from the third quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $53.4 million, a slight increase. So far, so good. But adjusted net earnings were $22.8 million, which was down from the prior quarter. Management attributed the drop to higher operating costs and currency-related losses due to the weaker Canadian dollar. These kinds of pressures are fairly common in asset management, especially for firms with international operations.
Looking ahead
Still, the dividend stock is making progress. Fiera has been working to streamline its operations and improve profitability. Its return on equity is currently around 11.4%, which signals efficient use of shareholder capital. But the profit margin, at 3.6%, is on the lower end for the industry. That could limit its ability to grow the dividend further or reinvest heavily into new initiatives.
One thing investors appreciate about Fiera is its transparency and commitment to returning capital to shareholders. The dividend stock hasn’t missed a dividend in over a decade, even during periods of market volatility. That reliability makes it a potential fit for anyone who values consistent income, especially in a TFSA, where those monthly or quarterly payments can grow tax-free over time.
Bottom line
So, is this dividend stock a good buy? That depends on your goals. If you’re looking for a stable, defensive stock with low volatility, Fiera might not be your first pick. But if you’re building a TFSA portfolio with income as your priority, and you’re comfortable with some market ups and downs, this could be a strong addition. It’s especially appealing for investors who want to reinvest dividends to compound tax-free returns over the long term.
At the end of the day, Fiera Capital is an interesting play on income. For those seeking high-yield opportunities without straying too far from the blue-chip universe, FSZ is a dividend stock to watch.
