2 Everyday Stocks to Fuel Your Portfolio Growth

Leon’s Furniture Ltd. (TSX:LNF) and Pizza Pizza Loyalty Corp. (TSX:PZA) are refreshingly good investment options that most investors tend to overlook.

| More on:

One of the most gratifying experiences in investing is discovering a company that has immense potential for investment, yet is completely overlooked by investors. Often, these companies have stores or showrooms in local neighbourhoods across the country that we see daily, but we fail to associate them as investment opportunities.

Here are two everyday brands that you may have visited already today that are worth considering.

Leon’s Furniture Ltd.: a unique investment opportunity

Leon’s Furniture Ltd. (TSX:LNF) is a furniture store that is a perfect example of a great investment hiding in plain sight. My daily commute once consisted of walking past a Leon’s showroom, and I’d never considered the company as an investment opportunity at that time.

Leon’s is one of the oldest retailers in the country with a history dating back nearly a century. The company has quietly grown in recent years, primarily thanks to the 2013 acquisition of The Brick, a competitor that was, at the time, three times the size of Leon’s. The $700 million deal for The Brick increased Leon’s footprint from 76 to 306 stores and solidified the company as the largest furniture retailer in Canada, with a 20% hold over the furniture sales market.

Last year, Leon’s followed up with another deal, this time taking over the lease on several Sears Canada Inc. stores, including four in British Columbia, which allowed Leon’s to finally enter that province.

So, what makes Leon’s such a good investment?

The first reason to consider Leon’s is the company’s improving performance. In the most recent quarter, Leon’s reported total system-wide sales of $636 million, handily beating the $606 million reported in the same quarter last year by 4.9%.

Net income for the second fiscal quarter came in at $18.8 million, or $0.26 per share, beating the $16.9 million, or $0.24 per share, reported in the same quarter last year. Same-store sales saw a bump of 1% in the second quarter, coming in at $519 million.

Investors considering an investment in Leon’s will be happy to note that the company pays an impressive quarterly dividend of $0.12 per share, which, at the current stock price, results in a respectable yield of 2.73%. In terms of dividend growth, Leon’s hiked the dividend by 20% earlier this year.

Despite that level of growth, the dividend payout level remains a very manageable 40%.

Pizza Pizza Loyalty Corp.: the dividend and growth option

Investors hungry for more than growth would do well to take a glance at Pizza Pizza Royalty Corp. (TSX:PZA). Pizza Pizza is the largest pizza operator in Canada, with over 700 locations scattered around the country across two growing brands.

Surprisingly, Pizza Pizza has only branched out to five provinces, which means the company still has a massive opportunity to expand into other markets. That lack of saturation is just one reason to consider the company, but the monthly dividend that Pizza Pizza offers makes investing in the stock a compelling offer.

Pizza Pizza offers a monthly dividend of $0.0713, which translates into a very attractive 5.27% yield. In terms of growth, Pizza Pizza has appreciated over 50% in the past five-year period, making an investment in the company over the long term a great option to both dividend- and growth-seeking investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.  

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »