Thursday, 23 February 2017

Munch down on Canadian Dividends

Now in Canada we may not have the same number of food companies on our stock exchange but there are a few interesting choices.  There are a few good dividend payers and some that are have too high of a yield that it makes it sense that a dividend cut is its future plans.  Regardless of the dividend, you can be a shareholder of a company and whenever you see someone eating something from that company, you can take a warm feeling that person is lining your pockets with dividends.  You may or may not have dined at these establishments but you will for sure recognize the brand.  There is a saying, if you don't understand the company, don't buy into it.  Well how easy is it too understand a company except to munch down on their product.  Without further fanfare, here are some Canadian Food stock dividend payers:

The Keg (KEG.UN) yield 5.37%

The Keg Royalties Income Fund is actually not a stock but an open ended trust.  The trust pays monthly distribution is has consistently had attractive high yield.  The main objective of the fund is to pay the highest sustainable distribution to its shareholders through it's stores.  What more can you ask for, the fund is designed to pay monthly and provide the highest yield possible.  If you like your steak with a side of high yield then this stock maybe on your radar.

Boston Pizza (BPF.UN) yield 6.01%

The Boston Pizza Royalties Income Fund is an open ended trust fund.  This is not actually a stock that owns the Boston Pizza restaurants like you think.  They own the Canadian rights to the Boston Pizza trademark.  Which in turn the restaurants have to pay a royalty to use.  So basically this fund is indirectly receiving money through royalties from the restaurants.  The high yield is somewhat safe as the fund is designed to distribute monthly all available cash to its unit holders after it cash for working capital and a reserve are satisfied.  So if you like Boston Pizza's famous pizza sauce then this stock may just be right for you.

SIR Royalty Income Fund (SRV.UN) yield 7.69%

SIR Royalty Income Fund is in the business of owning and operating full service restaurants in Canada.  It operates concept restaurants including Jack Astors, Canyon Creek Chop House and Loose Moose Tap & Grill.  The fund intends to pay monthly distributions.  So if either of the above brands interest you, then again this stock may be right for you.

Pizza Pizza (PZA.UN) yield 4.83%

Pizza Pizza Royalty Corp owns the trademarks and trade names used by all it's franchisees.  Pizza Pizza franchises dominate the quick serve pizza industry in Ontario.  It also operates Pizza 73 in Western Canada which has over 100 stores.  Pizza Pizza has long been a staple in Ontario and now with this stock you will reap the benefits every time you see someone walk out of a store with takeout.  So next time you are wondering what stock to buy, think of some dipping sauce with that slice of dividend you could get with this stock.

A & W (AW.UN) yield 4.02%

A & W Revenue Royalties Income Fund is a Canada based limited purpose fund. The fund owns the trade mark and rights to the A&W name in Canada.  The fund's objective is maintain an annual payout ratio of 100%.  Now that number to me is very impressive.  The fund's sole purpose to pay monthly distributions to its unit holders through the royalties from over 800 A&W restaurants in Canada.  I am sure you have seen the commercials but with this fund, all those commercials will be helping you get more dividends into your account.

MTY Food Group (MTY) yield 0.96

MTY Food Group is a Canadian company that franchises and operates quick service restaurants in Canada.  It has 4 segments to its business, Corporate, Franchising, Distribution, and Processing.  Basically it does all the backend work all the way to consumer getting the product.  It operates under multiply banners with well known names such as Villa Madina, Thai Express, Yogen Fruz and Cultures.  Well established quick service restaurants and well known.  So next time you are wondering around the food court in the mall and notice of these names, you can rest assured that that lineup to buy food is also giving you dividends and is bolstering your trading account.

Second Cup (SCU) no yield

The Second Cup Ltd is a Canadian based specialty coffee retailer.  There are about 310 cafes operating under the brand name Second Cup in Canada.  There are about 30 Corporate stores but the rest are franchise based.  Besides the coffee, it also offers sandwiches, muffins, cookies, and a wide range of coffee related products.  So next time you get a coffee at Second Cup you can be confident that cup of java is giving you money if you own this stock.

Now all of these are stocks and not mutual funds even tho they are called income fund, or royalty fund.  There are no MER funds associated with these stocks.  They are all available to be purchased on the Toronto Stock Exchange any time, you just have to wait for the right price for you, remember buy low sell high.  It still holds true for dividend stocks.

Wednesday, 15 February 2017

Munch down on U.S. Dividends

Restaurant stocks are a little risky, since they are subject to food scares, seasonal demand, and recessions but they are fun and colourful, especially if they pay a dividend.  It's always fun to see someone eat a burger and have a certain great feeling that they are contributing to your RRSP or profit in your account.  The U.S. has a treasure trove of restaurant stocks, some very well known, some regionally known.  Whatever the stock, if it pays a dividend, it will get onto my radar.

Making income though dividend investing involves searching for solid companies that have a good chance of increasing the dividend year after year.  As the company's sales and profits grow, dividends usually grow also, and the money you get through dividends can be reinvested or used as cash.

With interest rates giving less than 1 percent on GICs and other "safe" investments, investors looking for yield can look at U.S. Restaurant stocks.

Without much fanfare, here are a few of my favourite U.S. Restaurant stocks:

Dine Equity (ticker: DIN).  Who doesn't like fluffy pancakes and affordable seafood?  Dine Equity known for International House of Pancakes and Applebee's gives a great dividend yield of 5.81% with a low P/E ratio of 12.09. They also are raising their dividend payouts 2 times in the last 3 years.

Dunkin Brands Group (ticker DNKN).  If you love the stability of a good coffee and donut company then look no further than Dunkin Donuts.  This iconic brand in the U.S. increases their dividend annually and pays a respectable 2.31 percent yield.  With a lower yield provides more space for the dividend to be paid for a very long time.  The company is adding Franchises even tho they are a very large company.  With recent earnings beats and dividend hikes, this company looks to be as strong as ever.

Yum Brand (ticker YUM). Another above average restaurant stock with a dividend yield above the industry average.  Yum Brands is known for KFC, Taco Bell, and Pizza Hut.  This stock pays a yield of 2.52% which at this level is very sustainable for the near future.  With a very strong history of annual dividend hikes, you will sure be enjoying your fried chicken or pizza more than usual.

Darden Restaurants (DRI). Known for family favourites such as Olive Garden and Longhorn Steakhouse.  Darden boasts a dividend yield of 2.94% and very strong history of raising dividend payouts, you will be enjoying these dividends with your family meal.  Darden has a strong management team that delivers value to shareholders through cost controls and delivering a consistent  dining experience.  They have diversified their company with a more upper class dining experience by purchasing The Capital Grille.

So there you have some of the more stable dividend U.S. Restaurant stocks out there.  Of course as with all advice, please do your own research.

Disclamer : I do not own any of the above stocks mentioned in this article.