As interest rates fall and home prices continue to rise, investors seeking stable income should consider Firm Capital Mortgage (TSX:FC). Over the past year, FC shares have risen by 9%. This is supported by a robust 8.3% dividend yield, making it an attractive option in the current economic landscape.

But thereâs far more than just todayâs growth. This TSX dominator has more to come, especially with the change in interest rates. So, letâs get into what makes this stock so great.

Staying strong

Firm Capital has demonstrated consistent performance, supported by a diversified portfolio of mortgage investments. The companyâs focus on capital preservation and generating stable returns for shareholders has resulted in its impressive dividend yield of 8.3%. With shares up 9% in the past year, FC has shown resilience amid market fluctuations. This demonstrates its potential as a reliable income-generating asset.

The current economic environment is particularly favourable for Firm Capital. As interest rates decline, borrowing costs decrease, encouraging more homebuyers and investors to enter the real estate market. This surge in demand is driving up home prices, enhancing the value of Firm Capitalâs underlying assets.

Furthermore, lower interest rates also mean lower borrowing costs for FC itself. This can positively impact its profitability and, subsequently, its ability to sustain and potentially increase dividend payouts. The combination of rising asset values and reduced costs positions FC favourably in the market.

Earnings and growth

Firm Capital Mortgage's recent earnings report highlighted strong financial health and promising growth prospects. The company reported a solid increase in net income, driven by prudent management of its mortgage portfolio and strategic investments. FC's ability to identify and capitalize on high-quality mortgage opportunities has bolstered its revenue streams, ensuring steady dividend distributions to shareholders.

Additionally, the companyâs disciplined approach to risk management has minimized defaults and protected investor capital, further strengthening its appeal as a dependable dividend stock.

For instance, Firm Capital continues to leverage its market expertise to enhance shareholder value. The companyâs strategic initiatives, including expanding its mortgage portfolio and exploring new investment opportunities, are expected to drive future growth. FCâs proactive approach in identifying lucrative investments while maintaining a conservative risk profile positions it well for sustained success.

Moreover, FC's strong market position and extensive industry experience provide it with a competitive edge in navigating the evolving real estate landscape. The companyâs established relationships with borrowers and extensive due diligence processes ensure high-quality investments, contributing to its consistent performance and reliable dividend payouts.

Bottom line

Analysts remain optimistic about Firm Capitalâs prospects, with many highlighting its attractive dividend yield and solid growth potential. The companyâs prudent financial management and favourable economic conditions have garnered positive sentiment among investors, further supporting its status as a top dividend stock on the TSX.

This top TSX stock, therefore, stands out as a dividend stock to watch. With shares up 9% over the last year and an impressive 8.3% dividend yield, FC offers a compelling investment opportunity in todayâs market. The favourable economic environment, coupled with the companyâs strong financial performance and strategic initiatives, positions it well for continued success. Investors seeking stable income and long-term growth should consider adding Firm Capital Mortgage to their portfolios.

The post TSX Domination: The 8.3% Dividend Stock to Watch appeared first on The Motley Fool Canada.