- Small-cap dividend stocks in Canada offer a unique blend of growth potential and income, making them attractive for long-term investors
- These stocks often signal financial health and stability, with dividends providing a buffer during market volatility
- Top picks include Sprott Inc. (TSX:SII) , Savaria Corp. (TSX:SIS), Bird Construction (TSX:BDT), Trisura Group (TSX:TSU), and Hammond Power Solutions (TSX:HPS.A)—each with strong fundamentals and consistent payouts
- Investors ought to conduct deeper due diligence to uncover hidden opportunities and build a resilient, income-generating portfolio
In the ever-evolving landscape of investing, small-cap dividend stocks often fly under the radar. While large-cap giants dominate headlines, savvy investors know that smaller companies can offer a compelling mix of growth potential and income generation. This article explores five standout Canadian small-cap dividend stocks that are making waves on the TSX, TSX Venture, and CSE. Whether you’re building a diversified portfolio or seeking reliable passive income, these hidden gems deserve a closer look.
This article is a journalistic opinion piece that has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Why small-cap dividend stocks matter
Small-cap stocks—typically companies with market capitalizations under $2 billion—are often in the early stages of growth. This means they can offer outsized returns compared to their large-cap counterparts. When these companies also pay dividends, they provide a rare combination of capital appreciation and income, making them attractive to long-term investors.
Dividend-paying small caps can also signal financial health and management confidence. Unlike speculative growth stocks, dividend payers must maintain consistent cash flow, which can act as a buffer during market downturns. For Canadian investors, these stocks may also qualify for the dividend tax credit, enhancing after-tax returns.
Now, let’s dive into five top Canadian small-cap dividend stocks worth watching in 2025.
1. Sprott Inc.
Sector: Financials
Dividend yield: ~1.5 per cent
Sprott (TSX:SII) is a global asset management firm specializing in precious metals and real assets. With strong exposure to gold and uranium, Sprott benefits from rising demand for commodities as a hedge against inflation. Its recurring revenue model through management fees ensures stable cash flow, supporting consistent dividend payments. The company has demonstrated solid five-year earnings and dividend growth, making it a reliable pick for income-focused investors.
2. Savaria Corp.
Sector: Healthcare
Dividend yield: ~3.5 per cent
Savaria (TSX:SIS) designs and manufactures accessibility solutions, including stairlifts and home elevators. With Canada’s aging population and increasing demand for mobility aids, Savaria is well-positioned for long-term growth. The company has a history of dividend payments and continues to expand globally, offering both stability and upside potential.
3. Bird Construction Inc.
Sector: Industrial/Construction
Dividend yield: ~4.5 per cent
Bird Construction (TSX:BDT) is a notable Canadian construction company involved in infrastructure, commercial, and institutional projects. With increased government spending on infrastructure, Bird is poised to benefit from long-term contracts and stable revenue streams. Its consistent dividend payments and strong balance sheet make it a solid choice for investors seeking income and exposure to the construction sector.
4. Trisura Group Ltd.
Sector: Insurance
Dividend yield: ~1.2 per cent
Trisura (TSX:TSU) is a specialty insurance provider with operations in Canada and the U.S. The company has shown impressive growth in premiums and earnings, supported by a scalable business model. While its dividend yield is modest, Trisura’s rapid expansion and profitability suggest potential for future dividend increases.
5. Hammond Power Solutions Inc.
Sector: Industrials
Dividend yield: ~2.0 per cent
Hammond Power Solutions (TSX:HPS.A)manufactures dry-type transformers and electrical products. With the global push toward electrification and renewable energy, demand for its products is rising. The company has delivered strong financial results and maintains a healthy dividend, making it a compelling pick for investors seeking exposure to industrial innovation.
Final thoughts: Dig deeper, invest smarter
Canadian small-cap dividend stocks offer a unique opportunity to combine growth with income. While they may not have the brand recognition of large-cap names, their potential for capital appreciation and consistent payouts make them valuable additions to any diversified portfolio.
However, as with any investment, due diligence is key. Investors should analyze financial statements, understand industry trends, and assess management quality before committing capital. These five companies are a great starting point—but the real edge comes from digging deeper.
Ready to uncover your next dividend gem? Start your research today and let your portfolio benefit from the power of small-cap dividends.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.
