This Growth Stock, up 25%, Just Boosted its Dividend by 30%!

This growth stock offers dividends, growth, as well as a solid option during a recession. Yet it still trades in value territory!

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If you’re looking for a growth stock to get in on, one of the best performers of 2023 so far has been TFI International (TSX:TFII). The transportation and logistics company has risen 25% since January alone. What’s more, the company just boosted its dividend by a whopping 30%!

Why the jump?

TFI stock continued to climb, as the company’s earnings came above estimates again and again. Transportation and logistics have proven to be a much-needed strategy for suppliers these days. As you’re likely already aware, supply-chain demands have been high over the last few years. Yet even during a potential recession, TFI stock looks like it will continue to do well.

Why? During a downturn, every company wants to save and cut costs. Some of these costs can go to outsourcing through companies like TFI stock. That means not only should TFI stock continue to do well, but it should continue to grow, even during a recession!

A dividend boost

TFI stock has been increasing its dividend for years now. However, a 30% boost shows incredible confidence ahead of a recession. Now, investors can bring in $1.88 per share on an annual basis. This comes out each quarter at $0.47 per share.

Granted, if you’re buying this stock for the dividend, be aware that you’ll need to make a pretty hefty investment at these prices. TFI stock currently trades at $166.73 as of writing. If you wanted, say, $500 per year, you can see what that would cost you in the table below.


Still, could history repeat itself?

The question here is whether TFI stock will continue to do well after the recession. To see that, we have to look at how the company has performed in the past.

In that case, TFI stock can certainly boast a lot of growth. Shares of the company are up a whopping 5,977% in the last two decades! That comes to a compound annual growth rate (CAGR) of 22.77%!

Then there’s the company’s dividend to consider as well. After all, we’re unlikely to see a 30% growth in dividend year after year. However, anything is possible! Still, looking back at the last decade alone, we can see that TFI stock has a dividend CAGR of 12%. That’s still incredibly high compared to most other dividend stocks.

Bottom line

TFI stock has seen immense growth in the last few months, as well as the last year and even the last few decades. Shares are up, and the company continues to boost its dividend, even ahead of a recession. Yet it still trades in value territory at just 13.75 times earnings as of writing!

Therefore, if you’re looking for a growth stock that could lead to even more dividend growth in the future, I would certainly consider TFI stock a great buy. Shares look like they won’t slow down anytime soon, but if there is a dip, it could be the perfect time to jump in.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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