Investing for Passive Income? Pick Up This Little-Known Dividend Stock

This dividend stock has a massive future opportunity for investors seeking a high dividend and long-term growth strategy.

| More on:

Now is a great time for investors seeking passive income. No, really! If you need fixed income, then you can look to bonds, Guaranteed Investment Certificates, and more for some solid income. Or you can consider a great dividend stock.

Today, I’m going to cover the latter: a little-known dividend stock with a super-high yield that you can pick up now for passive income. What’s more, I’ll cover why this company should rebound well during the next year and beyond.

Peyto stock

Peyto Exploration & Development (TSX:PEY) is an oil and gas company with a $1.92 billion market capitalization. It’s been a difficult time for energy stocks in oil and gas lately, yet Peyto stock has proven quite strong.

You can see that strength during its most recent earnings report, where not only did the company reduce debt during this difficult time but also increased its reserves. Peyto stock invested $482 million in capital in organic activities for full-year 2022, with a $42 million investment in a new plant, but excluded $48 million in acquisitions for future opportunities.

But there’s something else I think investors should pay attention to for Peyto stock. The company has proven to be one of the lowest producers of greenhouse gas emissions in natural gas production. It’s focused on reducing methane emissions, which are down by 75% from 2016 levels, and has shifted to zero-emission pumps and converting its chemical pumps to solar-powered unit.

Granted, it’s still an oil and gas producer. However, this could give a clue as to the “future opportunities” the company has acquired in the last little while. That is why the dividend stock could be major opportunity.

And it’s so cheap!

The best part about this dividend stock? You get high yields for high value. Peyto stock currently offers an insanely high 11.85% dividend yield as of writing! This comes to $1.32 per share annually. It also trades at just 5.53 times earnings as of writing, putting it well within value territory.

Peyto stock is still up by 16.5% in the last year; however, there has been movement in the last year. Peyto stock bottomed out in October, along with practically every other company out there. It then climbed to November, but in the last three months is down by 22%. This comes from poor earnings and an uncertain year for oil and gas companies.

But don’t let macro issues keep you from Peyto stock and bringing in passive income this high. The dividend stock is likely to reach 52-week highs at $17 once more. Meanwhile, you can bring in dramatically high dividends. How high? Let’s compare today’s share price to those highs from a $10,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDEND
(Annual)
TOTAL PAYOUT (Annual)DIVIDEND FREQUENCY
PEY: Today$11909$1.32$1,199.88Monthly
PEY: 52-week highs$17588$1.32$776.16Monthly

Bottom line

As you can see, this undervalued dividend that seems to be destined for 52-week highs provides a huge difference in passive income right now. You can bring in $423 more in passive income each year by investing today and see your shares create huge returns in the next year and beyond.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »