Fiera Capital (TSX:FSZ) is the kind of dividend stock that income-focused investors can’t help but notice when it’s down this much. A 35% drop in a year for an established asset manager with a high dividend yield looks, on the surface, like a bargain. But before calling it a “buy for life,” investors need to look closely at what’s behind that decline, and whether the company’s income engine still runs smoothly enough to support a lifetime of dividends.
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About FSZ
Fiera is one of Canada’s largest independent asset management firms, with roughly $159 billion in assets under management (AUM) as of mid-2025. It earns fees for managing money on behalf of pension funds, institutions, and private clients. In good times, this is a cash-rich business. But it’s also one that rises and falls with markets. When assets decline or clients pull money, fee revenue drops, and that’s exactly what’s been happening. The global equity and bond pullback over the past year, coupled with a rotation away from smaller independent managers toward low-cost exchange-traded funds (ETFs), has squeezed Fiera’s growth and profitability.
In its second-quarter 2025 results, Fiera reported revenue of $163 million, down from the prior year, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $46 million, also lower year over year by about half. Net earnings came in at $3.76 million, compared to $25.55 million in the same quarter of 2024. Management cited market volatility and lower performance fees as the main culprits. The stock’s 35% slide reflects those pressures. That’s a valid concern, but it also creates an opportunity if Fiera can stabilize.
Is there a draw?
The main draw for income investors is, of course, Fiera’s dividend yield, which now sits around 12%, far higher than most of the TSX. On paper, that’s enticing. But such a high yield always raises the question: Is it sustainable? The payout ratio, which is how much of the profits go to dividends, is now above 225% depending on the quarter. That means Fiera is effectively paying out everything it earns. If earnings dip further, it could be forced to fund part of that dividend with debt or cash reserves. That’s not ideal for long-term sustainability.
That said, Fiera does have strengths that could support a recovery. The company’s management has been aggressively cutting costs, streamlining operations, and selling non-core assets to free up cash. It has also been shifting its business toward higher-margin, alternative investments, such as private credit and infrastructure. If this strategy works, Fiera could rebuild profit margins and gradually lower its payout ratio back into safer territory. In the meantime, the dividend remains covered by free cash flow, albeit tightly.
Considerations
From a valuation standpoint, FSZ looks undeniably cheap. It trades at 7.02 times forward earnings, well below historical averages for asset managers. That discount likely prices in much of the bad news already. If markets recover and assets under management rise, the dividend stock could see a sharp rebound, and long-term investors collecting that 12% yield could be paid handsomely to wait.
For an investor seeking lifetime income, Fiera could play a role, but it’s best viewed as a higher-risk, higher-reward holding. The dividend is generous, but it’s not bulletproof. If you’re relying on a steady income for retirement, Fiera shouldn’t be your only income source. It’s more appropriate as part of a diversified dividend portfolio, paired with more stable names to balance the risk.
Bottom line
Fiera Capital looks tempting while it’s down 35%, but it’s not a guaranteed “buy-and-forget” income stock. It’s a turnaround story wrapped in a high-yield dividend. If management succeeds in rebuilding profitability and stabilizing AUM, today’s price could represent an attractive long-term entry point. But if earnings continue to slip, that 12% yield could eventually be cut. For investors comfortable with some volatility and willing to take a calculated risk for a potentially strong income stream, FSZ could pay off. Yet it’s a stock to watch closely, not one to buy and stash away without keeping an eye on the numbers.
