One low-cost way to start a monthly passive-income stream is to buy and hold high-quality dividend stocks with monthly payouts. One such small-cap Canadian dividend stock is Decisive Dividend (TSXV:DE), which offers you a yield of 7.6% in November 2025.
Valued at a market cap of $143 million, Decisive Dividend is a Canadian manufacturing company that operates through two segments: Finished Product and Component Manufacturing.
The company produces wood-burning stoves, fireplace inserts, and fireplaces sold across North America and internationally. Its portfolio includes air blast sprayers (Turbo Mist brand), wastewater evaporators (EcoMister brand), and industrial wear parts, such as valves, grinding mill liners, and grizzly panels.
Decisive also manufactures road maintenance equipment, CNC-machined parts, hydraulic fracturing tools, truck and automotive components, fuel tanks, radiators, and PTFE conveyor materials.
Additionally, the company distributes fast fuel filling systems and produces retail merchandising solutions, including product pushers, shelf management systems, and display fixtures for consumer goods customers.
In 2025, Decisive Dividend offers a monthly dividend of $0.045 per share, yielding 7.6%.
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Is this dividend stock a good buy?
In the third quarter (Q3) of 2025, Decisive Dividend reported consolidated sales of $34 million, an increase of 5% year over year, while adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) rose 3% to $5.8 million. In the first nine months of 2025, its revenue growth was 21%, while EBITDA grew 39% year over year.
Decisive Dividend explained that customer-specific demand in segments such as Hawk and Northside declined due to weak U.S. economic conditions, which was offset by strong performance in businesses including IHT, Unicast, and Techbelt.
- The agricultural businesses stood out with 73% higher year-to-date sales and 111% growth in Q3, driven by robust order activity for IHT’s energy-efficient heating products for hog production.
- The wear parts segment delivered a 41% year-to-date sales increase.
- Hearth products grew 6%, merchandising rose 8%, while industrial products maintained an 11% year-to-date gain despite Q3 headwinds.
CEO Jeff Schellenberg noted that over 50% of sales originate from the U.S., making it vulnerable to the ongoing trade war. Notably, certain commercial vehicle and oil and gas customers signaled lower demand in the second half of 2025.
Management stated it is working with Hawk leadership to reposition that business, while other units work to add profitable customers in non-tariff-impacted regions.
Is this Canadian stock undervalued?
The company’s free cash flow rose 53% year over year, allowing it to lower the dividend payout ratio to 76% in Q3, from 96% in 2024. A lower payout ratio enables Decisive Dividend to sustain the current dividend and pursue accretive acquisitions.
Decisive completed three acquisitions in Q3, all within existing verticals to accelerate integration. Management remains focused on both smaller tuck-in deals led by subsidiary teams and larger strategic acquisitions as balance sheet capacity improves.
With current order backlogs running 10% higher than last year and new products launching across the portfolio, Decisive Dividend appears positioned for continued progress despite macro uncertainties. Decisive Dividend’s growing free cash flow also enabled it to improve the leverage ratio from 3.1 times in 2024 to 2.5 times in Q3.
Analysts tracking the small-cap stock forecast free cash flow (FCF) to improve from $11 million in 2025 to $15.7 million in 2027. Given its annual dividend expense of roughly $11 million, its dividend-payout ratio should improve to 70% in 2027.
If the Canadian stock is priced at 10 times forward FCF, it should return 10% over the next 12 months. If we adjust for dividends, cumulative returns should be closer to 17%.
