Some stocks just quietly go about their business, making money for shareholders year after year. Cascades (TSX: CAS) might be one of them. The market hasn’t been kind lately, but that could be exactly why it’s worth a closer look right now. So, let’s dig deeper into this dividend stock
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What happened?
Shares are down close to 26% from their 52-week high, trading around $10 after peaking near $13.42. For income investors, that drop means a richer yield and a potentially attractive entry point. And despite the price slide, the dividend stock just posted solid progress in its latest quarter.
In the second quarter (Q2) of 2025, sales came in at $1.19 billion, up slightly from a year ago, thanks to stronger selling prices and a favourable currency exchange. Volumes dipped, but margins improved as the company kept costs under control. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 22% to $137 million, lifting margins to 11.5% from 9.5% a year earlier. That’s no small feat in an industry where transportation, energy, and raw material costs can eat into profits quickly.
Debt is another bright spot. Cascades cut net debt by $112 million from Q1, bringing it to $2.1 billion and lowering leverage from 4.2 times to 3.8 times EBITDA. This isn’t just a balance sheet win; it gives the company more flexibility to weather slowdowns or invest when opportunities appear.
More to come
The dividend is also holding steady. The board declared a quarterly payout of $0.12 per share, which works out to a yield of roughly 5% at today’s prices. For a dividend stock with over half a century of operations, that’s a respectable income stream to lock in. And while Cascades didn’t buy back shares last quarter, its balance sheet improvements and cash flow strength suggest the dividend is well supported.
Looking ahead, management expects Q3 to improve slightly from Q2. Packaging results should remain stable thanks to firm pricing and lower raw material costs, though demand is still a question mark. Tissue is set to do better, driven by stronger volumes and stable costs. The dividend stock is also targeting significant profit improvements over the next year and plans to unlock value from asset sales, which could further reduce debt and support growth.
Of course, there are risks. Weak demand in packaging could limit gains, especially if economic conditions worsen. Operational hiccoughs, such as the planned maintenance that affected Q2 tissue results, can weigh on short-term performance. And while debt is trending lower, it’s still high enough to keep some investors cautious.
Foolish takeaway
For long-term income seekers, the picture is appealing. You’ve got a business that has survived multiple economic cycles, operates in essential markets like packaging and tissue, and is actively improving its profitability and balance sheet. Combine that with a healthy dividend yield and a stock price well off its highs, and it starts to look like an opportunity hiding in plain sight — especially with $10,000 invested paying out around $485 each year!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CAS | $9.88 | 1,012 | $0.48 | $485.76 | Quarterly | $9,999.00 |
If Cascades can keep improving margins, chip away at debt, and maintain its dividend, today’s lower price could be remembered as a bargain for those who locked in shares. It’s not the kind of dividend stock that makes headlines, but sometimes, the best income investments are the ones quietly compounding in the background.
