Growth and fixed income: it’s the best of both worlds. But it’s a world that’s getting smaller and smaller these days, especially ahead of a recession. However, there is at least one dividend stock that continues to grow. And it’s one analysts don’t expect to slow down, providing an opportunity to create stellar income of even $500 per year, starting right now.
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Restaurant Brands
Yes, Restaurant Brands (TSX:QSR) has had a shaky past, to be sure. The company fell apart during the pandemic, dropping from a peak in August 2019, to ultra lows in March 2020, and still struggling to rebound — that is, until the last month or so.
Shares are finally back to where they were back during those 2019 levels. Yet analysts believe there is even more room to grow. What’s been going on for Restaurant Brands stock? Well, the biggest news came this month when the company announced further expansion of both Popeyes and Burger King to Eastern Europe. So, that certainly led to a share price bump.
But that’s not the only reason to invest in Restaurant Brands stock. Entering a recession may actually be a good thing for the fast-food retailer. The offering of cheap food means consumers will likely move away from higher-priced takeout options, heading back to their old, cheap favourites.
More specifics?
That’s all well and good for fast food as a whole, but what’s been going so well that Restaurant Brands stock can afford to expand in Europe? The company recently appointed the former Domino’s Pizza chief executive to its new executive chair in November.
This is important to note, as in the past, there has been a focus on Burger King expansion in the United States. However, it’s likely the new executive will look at the overall portfolio for now. This will mean fewer mergers and acquisitions in the near term. Instead, QSR will focus on deleveraging its balance sheet — another good move during a recession. Analysts now predict Restaurant Brands stock should outperform in the near term.
Get the $500 before it’s too late!
By too late, I mean you should invest before shares climb even higher. Should the company continue to demonstrate strong earnings as well as improvements to its chains, the yield is only going to shrink — especially if the company is using its cash flow to strengthen its balance sheet.
So, while it may trade at 20.84 times earnings, I would still consider it a great deal. You can bring in a 3.32% dividend yield as of writing, which comes to $2.94 per share annually. So, if you’re aiming for $500 in annual income, here’s how that plays out:
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| QSR | $88.15 | 170 | $2.94 | $500 | annually |
As you can see, it would take 170 shares to bring in $500 annually. That currently would come to $14,985.50! While it’s not a small investment, it’s certainly manageable even in a Tax-Free Savings Account (TFSA).
If you’re looking for a place to store your cash, keep it climbing, and bring in strong annual income, Restaurant Brands stock may be your top choice.
