2 Ultra-High-Yield Dividend Stocks That Could Double Your Money Before 2028

Not every high-yielding stock is as risky as most others. Here are two ultra-high-yielding dividend stocks to consider.

| More on:

The Toronto Stock Exchange (TSX) has no shortage of dividend stocks. However, seeing double-digit yields is a rarity, at least not without a high degree of capital risk involved. Double-digit dividend yields are not common, but it can happen when stocks offering reasonably high yields fall on the stock market, inflating the yields.

Unusually high-yielding dividends typically indicate that the stock is too risky. However, it can be a great opportunity to grow your wealth rapidly when the underlying business is solid.

When dividend yields are unusually high and the stock is not financially healthy, a dividend cut or complete dividend suspension is a reasonable possibility. If you are focused on dividend investing, allocating money to a dividend stock that is slashing or suspending its payouts is not ideal.

However, investing in ultra-high-yielding dividend stocks with a decent shot at recovery can offer you amazing returns on your investment. Between better returns due to higher yields and capital gains as the stock recovers, investing in the right dividend stocks can generate a lot of wealth growth. Today, I will discuss two TSX dividend stocks you can consider for this purpose.

Fiera Capital

Fiera Capital Corp. (TSX:FSZ) is a $631 million market capitalization investment firm headquartered in Montreal. It has always been a generous dividend-paying stock but has become more so in recent years. While it has offered high-yielding payouts for a few years, its dividend yield right now is the highest it has been. As of this writing, Fiera Capital stock trades for $7.57 per share, boasting an 11.36% dividend yield.

At current levels, it trades for a 50% discount from its November 2013 all-time high. Barring the sudden dip and recovery in 2020 due to the pandemic, it has been on a slow downward trajectory in that time.

Valued at 6.4 times forward earnings, Fiera Capital stock is well-positioned to deliver substantial growth in the second half of 2023. Even if it does not recover to its 2013 levels, the combination of capital gains and high-yielding dividend income can easily deliver stellar returns on your investment in the coming years.

True North REIT

The series of interest rate hikes by the Bank of Canada (BoC) has made it difficult to invest in growth stocks. True North REIT (TSX:TNT.UN) is a $308 million market capitalization Real Estate Investment Trust (REIT) you can consider investing in for significant wealth growth in the next few years.

As of this writing, True North REIT trades for $3.34 per share, reflecting a 44.2% year-to-date decline in 2023. The release of its final fiscal 2022 earnings hit hard and triggered the sell-off after it announced a 50% reduction in its distribution.

However, the reduction in its payout and a strategic sale of two Ontario-based properties in its portfolio will strengthen its financial situation. At current levels, it boasts a massive 8.89% annualized dividend yield despite slashing the payout in half.

While this may be alarming for some, the steps its management has taken can allow the stock to recover while distributing payouts on schedule. A recovery to its February 2023 levels alone can double your investment. Combined with regular dividend income, it can offer substantial total returns in the coming years.

Foolish takeaway

Both ultra-high-yielding dividend stocks might remain small-cap stocks after a complete recovery, but it does not mean they are too risky to consider. While they might not offer the same stability as blue-chip stocks, Fiera Capital stock and True North REIT can be good investments to capitalize on high-yielding dividends and capital gains to boost your wealth in the coming years.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Fiera Capital. The Motley Fool has a disclosure policy.

More on Dividend Stocks

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

Dividend Stocks

The 3 Top Canadian Stocks to Buy With $1,000 Right Now

If you want consistent income, look to consistent dividend payers. These three stocks are some of the best in the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Want a 6% Average Yield? 3 TSX Stocks to Buy Today

These stocks pay good dividends that should continue to grow.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Is Alimentation Couche-Tard Stock a Buy for its 0.9% Dividend Yield?

Couche-Tard stock's small yield is not enticing, but its growth potential could be a wealth creator.

Read more »

Hourglass and stock price chart
Dividend Stocks

5.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades!

With its 5.2% dividend yield, Toronto-Dominion Bank (TSX:TD) is a stock I'm eagerly buying.

Read more »