3 Dividend Stocks to Buy Hand Over Fist

Here are some dividend stocks that could do well over the next few years. See if they resonate with your investing strategy.

Kay Ng

Author Bio

Kay graduated from the University of British Columbia with a Bachelor of Science in Computer Science and furthered her studies in financial markets, finance, and financial accounting. She began investing in dividend stocks in 2008, turning an early interest into a lasting passion. Over the years, Kay has refined her investment approach to focus on high-quality businesses, using fundamental analysis and valuation to identify long-term investment opportunities. Her investment research and articles have been featured in The Motley Fool, Sure Dividend, and Seeking Alpha. Outside of investing, Kay enjoys playing the piano, from popular songs learned by ear to challenging classical compositions. Her favourites include Fantaisie-Impromptu by Frédéric Chopin and La Campanella by Franz Liszt.

Education

Bachelor of Science (BSc) in Computer Science, University of British Columbia Further studies in financial markets, finance, and financial accounting

Areas of Expertise

Dividend stocks, fundamental analysis, company valuation, quality investing, long-term investing, business fundamentals, and identifying investment opportunities in high-quality companies.

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Favorite Investment Quotes

“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.” — Benjamin Graham “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett

Published August 6, 2022 1:45 pm EDT

Here are three dividend stocks that could do well over the next few years. Two businesses released their earnings results on Thursday and rallied up to 9%.

A worker drinks out of a mug in an office. — Source: Getty Images

Saputo stock released its earnings results and popped 9%

Saputo (TSX: SAP) reported its fiscal first-quarter (Q1) 2023 results on Thursday. It experienced a heck of a rebound in results. Here are the key highlights compared to fiscal Q1 2022:

Revenue growth of 24.1% to $4,327 million
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), a cash flow proxy, growth of 19.7% to $347 million
Net earnings jumped 162% to $139 million
Earnings per share (EPS) increased 154% to $0.33
Adjusted net earnings rose 32% to $161 million
Adjusted EPS increased 34% to $0.39

The dividend stock reacted with a 9% rally yesterday. The Saputo CEO sounded very positive, suggesting that the stock could experience greater gains through the year.

“We’re off to a strong start to the year. The combination of our pricing actions, productivity improvements, and cost containment initiatives mitigated the impact of inflationary pressures in the first quarter. As input costs stabilize and price realization and efficiencies continue, this should result in further recovery for the balance of the year, with progress on margins and adjusted EBITDA.
While the external environment has required a laser focus on short-term execution, we continue to lay the groundwork for our next chapter of sustained growth and we will continue to deploy our time and resources to our Global Strategic Plan, keeping a view on maximizing long-term value creation.”
Lino A. Saputo, chair of the board, president and CEO

Should Saputo be able to contain costs, raise prices, and improve efficiency, the stock could continue trending higher to at least the $41 level for upside of more than 20%. It also pays a dividend yield of 2.1% to add icing to the cake.

Restaurant Brands stock rallied 7%

Restaurant Brands International (TSX: QSR)(NYSE: QSR) also reported its Q2 earnings results yesterday, which drove a 7% rally in the dividend stock.

Here are the key highlights compared to Q2 2021:

Global system-wide sales grew 14% to over US$10 billion
Consolidated comparable sales was 9.0%, driven by 12% at Tim Hortons and 10% by Burger King
Revenue growth of 14% to US$1.6 billion
Adjusted EBITDA growth of 7.1% to US$618 million
Adjusted EPS growth of 6.5% to US$0.82

Restaurant Brands is a capital-light business. For example, in the past two years, it used only 8.4% of its operating cash flow for capital spending with over US$2.4 billion of free cash flow left over. Its last-12-month free cash flow (FCF) generation was US$1,562 million, up 16% from a year ago. In this period, it used 61% of its FCF for dividend payments.

Newmont

Commodity stocks can be super volatile and risky. Who would have thought that Newmont (TSX: NGT)(NYSE: NEM) stock would hit a high of almost $109 per share in April and fall to a rock bottom of about $58 — roughly 47% lower?

No one wants gold stocks right now. So, it could be a good time to buy some shares in the gold miner. It is not a buy-and-hold dividend stock. Investors should aim to buy low (such as now) and sell high (when the market bids it up again). That said, currently, Newmont does pay a dividend yield of close to 4.9%. On a turnaround, it could hit at least $80 per share, but investors would need to bear high risk.