This Monthly Dividend Stock Looks Too Cheap to Ignore

2026-02-10 15:30:00 ET

A “too cheap” monthly dividend stock can still bite, so the first job is to separate a bargain from a value trap. Monthly payers feel comforting because cash shows up often, but the business still needs durable demand and real free cash flow. Check whether the payout leaves room after debt costs and reinvestment , and whether management has a history of raising, not stretching, the dividend. If the yield looks unusually high, assume the market smells trouble and go looking for it. So, is this a dividend stock to consider?

SIS

Savaria ( TSX:SIS ) does not sell glamour. It sells accessibility, and that theme keeps getting louder as the population ages. It makes and distributes mobility products like stairlifts, elevators, patient lifts, and adapted vehicles. It also runs a large network of installation and service operations. That service side matters, as it can smooth revenue when product cycles wobble.

Over the last year, the news has leaned positive as it focused on discipline. In November 2025, Savaria reported another quarter of margin progress, which helped push the dividend stock back toward its highs. In January 2026, it hosted an Investor Day and pointed investors to an April 2026 event where it plans to unveil a new five-year strategy. That kind of cadence usually signals that management feels in control, not reactive.

Dividend investors also got a fresh reminder that Savaria means what it says about monthly income. On January 23, 2026, it declared a monthly dividend of $0.0467 per share. That keeps the annualized run rate around $0.56. It is not a screaming yield at today’s price, but it looks steadier than most high-yield bait on the TSX. And right now, it could still bring in ample income, even from $7,000.

Earnings support

The latest results show why the story has improved. In Q3 2025, Savaria reported revenue of $224.8 million, up 5.2% year over year. Net earnings came in at $19.5 million, or $0.27 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $47.6 million, up 13.9%, and the adjusted EBITDA margin climbed to 21.2%. Those are not “moonshot” numbers, but the kind that make a dividend feel earned.

Looking ahead, management framed 2026 as a shift from mainly fixing margins to also pushing growth. It reiterated guidance that full-year revenue should land around $925 million with an adjusted EBITDA margin slightly above 20%. It also talked about expanding its Greenville facility and rolling out products like the Luma two-to-floor elevator. If it executes, it can keep compounding in a market that does not depend on consumer mood.

Now the “too cheap to ignore” part. Savaria’s valuation still looks reasonable beside many defensive industrial names trading at 29 times earnings. That multiple does not assume perfection, especially if margins keep trending higher and growth re-accelerates. The risk, of course, is that healthcare budgets tighten, integration distracts management, or competition forces pricing pressure.

Bottom line

So, could it be a buy? It could, if you want a monthly dividend stock that comes from a company with improving profitability and manageable leverage. It could also be a pass if you need a higher yield right now or if you cannot handle the fact that this stock can still swing with small-cap sentiment. If you’re shopping for “cheap,” the best tell will be the next couple of quarters. Keep the margin gains, keep the debt tame, and keep the dividend boring. For a Tax Free Savings Account (TFSA), that blend of monthly cash and steady growth can beat flashier picks when markets suddenly get noisy again.

The post This Monthly Dividend Stock Looks Too Cheap to Ignore appeared first on The Motley Fool Canada .

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

2026