Q: I am looking for a good dividend payer in a non-registered account. The industry does not really matter but a stable dividend and preferably a growing dividend would be important for the next 3 years.
Would Cascades be a good bet? If it is, what would be a reasonable entry point for price?
Thank you.
Would Cascades be a good bet? If it is, what would be a reasonable entry point for price?
Thank you.
5i Research Answer:
We would not consider CAS a great fit for the criteria in the question. For one, it is quite small at $976M market cap. Generally, income investors look for something bigger and safer. Two, it is highly cyclical, being in the paper/packaging sector. This year, for example, shares are already down 24% on economic/pricing concerns. But it has raised its dividend over time, starting at 4c in the early 2000s and now at 12c. It paid its dividend right through the Covid pandemic. It has had years of operating losses and debt is very high at 4X cash flow. We would consider it OK at $9.50 but for higher risk income accounts only.