An 8.8% Dividend Stock That’s Now a Standout Buy in 2026

When you’re judging whether a dividend looks safe, start with coverage and end with confidence. Earnings payout ratios tell you if profits cover the dividend, but cash flow coverage often matters more. That’s because companies pay dividends with cash, not accounting. You also need to watch debt and refinancing risk, as interest costs can crowd out dividends fast.

Finally, check whether the business can defend its revenue base, as a high yield can simply reflect the market pricing in decline. That’s why today, we’re looking at a dividend stock checking many, if not all, of these boxes.

Y

Yellow Pages (TSX: Y) looks like an unlikely income play in 2026, which explains why people keep talking about that 8.8% yield. The dividend stock runs Canadian digital media and marketing services. It helps local businesses get found online, generate leads, and manage advertising, while it still maintains legacy print directories. The dividend stock also owns well-known local properties like YP.ca and Canada411, so the brand still carries real awareness, even as the business shifts away from paper.

The share price story stays calm, which is not a bad thing for a dividend name. The dividend stock hit lows of $9.86 last year, climbing to around $12, a rise of 21% during that time. Over the past year, it has delivered basically flat performance, which means the dividend has done much of the heavy lifting for total return.

Then you hit the yield, and you understand the hook. Yellow Pages pays $0.25 per share quarterly, or $1.00 annually, which puts the yield around 8.8% at recent prices. That payout looks juicy, but it also forces a simple question: Does the business still generate enough cash to keep doing this comfortably while revenue trends lower?

Into earnings

Let’s look at earnings, then, to see whether the dividend can hold. In its third quarter of 2025, Yellow Pages reported revenue of $48.3 million, down 8.1% year over year. It posted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $10 million, which worked out to 20.6% of revenue, and it delivered net income of $4 million, or $0.29 per diluted share. It also reported adjusted EBITDA less capital expenditure of $9.6 million, which is a handy proxy for cash generation after reinvestment needs.

The cash details look encouraging, with a catch. Management said cash on hand at the end of October stood at about $59 million, and it declared the $0.25 quarterly dividend for Dec. 15, 2025. The catch comes from the top line. Revenue still declines, and management even flagged a Canada Post labour disruption that deferred about $500,000 of print revenue into the fourth quarter. This shows how easily small operational shocks can show up in the numbers.

Now, look at safety through the right lens. On an earnings basis, the payout can exceed reported earnings, which looks uncomfortable at first glance. On a cash basis, there is a much lower cash payout ratio, which suggests the dividend sits on a stronger footing than the earnings payout ratio implies. That split happens as Yellow Pages runs a mature, cash-generative model with limited capex needs, but it also lives with ongoing revenue pressure that can squeeze profitability over time.

Bottom line

So, is this dividend stock a standout buy in 2026? It can be, but only for a very specific investor. If you want a high yield backed by cash generation and a solid cash balance, the case looks credible, and the valuation looks modest for a dividend stock returning $1.00 a year in dividends. And this is what $7,000 could bring in with those numbers.

If you want a stable or growing business, you should stay cautious, as revenue still trends down and the market keeps pricing that risk into the yield. In plain terms, I’d treat it as an income-first special situation in 2026, not a set-it-and-forget-it dividend hero.