AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Investing in high-dividend stocks requires careful consideration beyond just the yield offered. Fiera Capital (TSX: FSZ), with a yield exceeding 10%, might appear attractive, but its viability as an investment depends on various factors.
Fiera Capital operates in the asset management sector, where revenue is closely tied to assets under management (AUM). This business is cyclical, with AUM fluctuating based on market conditions. Despite economic uncertainties, Fiera Capital managed to increase its AUM, indicating resilience and potential for growth. Additionally, investing in TSX dividend stocks offers investors opportunities for stable returns and income generation, particularly during market downturns.
The company's revenue growth in Q4 2023 demonstrates its ability to capitalize on market opportunities and effectively manage costs. The emphasis on lowering the cost base has contributed to improved profit margins and enhanced earnings.
Fiera Capital's strategy to focus on distribution and sales in key regions while expanding into new markets aligns with growth objectives. The private markets segment, in particular, presents significant growth potential, contributing substantially to AUM and sales.
Regarding dividend sustainability, Fiera Capital's payout ratio of 83% indicates that a significant portion of earnings is allocated to dividends. However, the company's strong cash flow generation and improving profit margins suggest that it has the capacity to sustain dividend payments. Moreover, the emphasis on debt reduction and balance sheet strengthening enhances financial stability.
At 8.3 times forward earnings, Fiera Capital stock appears relatively inexpensive considering its high dividend yield and expanding earnings base. However, investors should consider the cyclicality of the asset management industry and conduct thorough due diligence before investing.
In conclusion, while Fiera Capital offers an enticing dividend yield, investors should assess the company's ability to maintain dividends through economic cycles and its long-term growth prospects in the asset management sector.