Fiera Capital (TSX:FSZ) is the form of dividend inventory that income-focused buyers can’t assist however discover when it’s down this a lot. A 35% drop in a yr for a longtime asset supervisor with a excessive dividend yield seems to be, on the floor, like a cut price. However earlier than calling it a “purchase for all times,” buyers have to look intently at what’s behind that decline, and whether or not the corporate’s revenue engine nonetheless runs easily sufficient to help a lifetime of dividends.
About FSZ
Fiera is certainly one of Canada’s largest unbiased asset administration companies, with roughly $159 billion in belongings underneath administration (AUM) as of mid-2025. It earns charges for managing cash on behalf of pension funds, establishments, and personal shoppers. In good instances, this can be a cash-rich enterprise. Nevertheless it’s additionally one which rises and falls with markets. When belongings decline or shoppers pull cash, charge income drops, and that’s precisely what’s been taking place. The worldwide fairness and bond pullback over the previous yr, coupled with a rotation away from smaller unbiased managers towards low-cost exchange-traded funds (ETFs), has squeezed Fiera’s progress and profitability.
In its second-quarter 2025 outcomes, Fiera reported income of $163 million, down from the prior yr, and adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) of $46 million, additionally decrease yr over yr by about half. Web earnings got here in at $3.76 million, in comparison with $25.55 million in the identical quarter of 2024. Administration cited market volatility and decrease efficiency charges as the primary culprits. The inventory’s 35% slide displays these pressures. That’s a sound concern, however it additionally creates a possibility if Fiera can stabilize.
Is there a draw?
The primary draw for revenue buyers is, in fact, Fiera’s dividend yield, which now sits round 12%, far increased than many of the TSX. On paper, that’s attractive. However such a excessive yield at all times raises the query: Is it sustainable? The payout ratio, which is how a lot of the income go to dividends, is now above 225% relying on the quarter. Which means Fiera is successfully paying out all the things it earns. If earnings dip additional, it could possibly be compelled to fund a part of that dividend with debt or money reserves. That’s not perfect for long-term sustainability.
That mentioned, Fiera does have strengths that might help a restoration. The corporate’s administration has been aggressively reducing prices, streamlining operations, and promoting non-core belongings to liberate money. It has additionally been shifting its enterprise towards higher-margin, different investments, reminiscent of non-public credit score and infrastructure. If this technique works, Fiera might rebuild revenue margins and step by step decrease its payout ratio again into safer territory. Within the meantime, the dividend stays coated by free money movement, albeit tightly.
Concerns
From a valuation standpoint, FSZ seems to be undeniably low-cost. It trades at 7.02 instances ahead earnings, effectively under historic averages for asset managers. That low cost doubtless costs in a lot of the dangerous information already. If markets get better and belongings underneath administration rise, the dividend inventory might see a pointy rebound, and long-term buyers gathering that 12% yield could possibly be paid handsomely to attend.
For an investor in search of lifetime revenue, Fiera might play a task, however it’s finest seen as a higher-risk, higher-reward holding. The dividend is beneficiant, however it’s not bulletproof. In the event you’re counting on a gentle revenue for retirement, Fiera shouldn’t be your solely revenue supply. It’s extra applicable as a part of a diversified dividend portfolio, paired with extra secure names to steadiness the chance.
Backside line
Fiera Capital seems to be tempting whereas it’s down 35%, however it’s not a assured “buy-and-forget” revenue inventory. It’s a turnaround story wrapped in a high-yield dividend. If administration succeeds in rebuilding profitability and stabilizing AUM, immediately’s value might signify a beautiful long-term entry level. But when earnings proceed to slide, that 12% yield might ultimately be reduce. For buyers snug with some volatility and keen to take a calculated threat for a doubtlessly sturdy revenue stream, FSZ might repay. But it’s a inventory to look at intently, not one to purchase and stash away with out keeping track of the numbers.
