Fair Capital (TSX:FSZ) is the kind of dividend stock that income-oriented investors might want to take note of if it’s down this much. A drop of 35% in one year for an established asset manager with a high dividend yield seems like a bargain at first glance. But before calling it a “buy for life,” investors should take a close look at what’s behind that decline, and whether the company’s earnings engine is still running smoothly enough to pay dividends for a lifetime.
About FSZ
Fiera is one of Canada’s largest independent asset managers, with approximately $159 billion in assets under management (AUM) as of mid-2025. It earns fees for managing money on behalf of pension funds, institutions and private clients. In good times, this is a cash-rich company. But it is also a price that rises and falls with the markets. When assets decline or customers cash in, fee revenue declines, and that’s exactly what happens. The global downturn in stock and bond markets over the past year, coupled with a rotation from smaller independent managers to low-cost exchange-traded funds (ETFs), has put pressure on Fiera’s growth and profitability.
In its second-quarter 2025 results, Fiera reported revenue of $163 million, down from the prior year, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $46 million, also down year-over-year by about half. Net income came in at $3.76 million, compared to $25.55 million in the same quarter of 2024. Management cited market volatility and lower performance fees as the main culprits. The stock’s 35% decline reflects this pressure. That is a valid concern, but it also creates opportunities if Fiera can stabilize.
Is there a draw?
The main attraction for income investors is of course Fiera’s dividend yield, which is now around 12%, much higher than most TSX bonds. On paper that is tempting. But such a high return always raises the question: is it sustainable? The payout ratio, i.e. how much of the profit goes to dividends, is now above 225% depending on the quarter. That means Fiera essentially pays out everything it earns. If profits fall further, the country could be forced to finance part of that dividend with debt or cash reserves. That is not ideal for long-term sustainability.
That said, Fiera has strengths that could support a recovery. The company’s management has aggressively cut costs, streamlined operations and sold non-core assets to free up cash. It has also shifted its business to alternative investments with higher margins, such as private credit and infrastructure. If this strategy works, Fiera can rebuild profit margins and gradually return its payout ratio to safer territory. In the meantime, the dividend remains covered by free cash flow, albeit narrowly.
Considerations
From a valuation perspective, FSZ looks undeniably cheap. It trades at 7.02 times forward earnings, well below historical averages for asset managers. That discount will probably offset much of the bad news. If markets recover and assets under management rise, the dividend stock could see a sharp recovery, and long-term investors who collect that 12% yield could get a nice reward for waiting.
For an investor looking for lifelong income, Fiera could have a role to play, but it is best viewed as a higher-risk, higher-reward holding. The dividend is generous, but not bulletproof. If you rely on a steady income for retirement, Fiera shouldn’t be your only source of income. It is more appropriate as part of a diversified dividend portfolio, paired with more stable names to balance risk.
In short
Fiera Capital looks tempting even though it’s down 35%, but it’s not a guaranteed buy-and-forget income stock. It’s a turnaround story wrapped in a high-yield dividend. If management manages to rebuild profitability and stabilize assets under management, the current price could provide an attractive long-term entry point. But if profits continue to decline, that 12% yield could eventually be reduced. For investors who are comfortable with some volatility and are willing to take a calculated risk for a potentially strong income stream, FSZ could be rewarding. Still, it’s a stock to keep a close eye on, not one to buy and hold without keeping an eye on the numbers.
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