If you want a stable shot to make a million dollars over several years, then you want a stable stock that can get you there. In this case, royalty stocks are a superb choice. That is why I’m recommending TSX stock Pizza Pizza Royalty (TSX: PZA).
Pizza Pizza Royalty
Royalty stocks are strong choices when looking for a stable TSX stock that’s going to provide you with low-risk earnings. While this can mean that growth is slow, it’s steady. And in the meantime, you’re provided with incredible income in some cases.
The reason it’s low risk is because the stock’s performance doesn’t depend necessarily on company performance. Instead, payments are made by each location of Pizza Pizza to the company for use of their asset or property. Those payments don’t change, even if the company is doing poorly, which is why the income is stable and ongoing.
Such is the case of Pizza Pizza stock and why it continues to do so well. Even so, it remains in value territory trade at just 15.98 times earnings. Further, it’s on par with where it was a year ago in terms of share price. And that’s still only slightly lower than its 52-week high.
With that in mind, it’s a great time to consider Pizza Pizza stock for long-term, stable income. You can bring in a dividend yield at 6.29% as of writing, and look forward to more growth in the future!
Numbers don’t lie
To figure out how long it could take it reach $1 million in your portfolio, we need to look at historical performance of this TSX stock. For Pizza Pizza, shares have been on the market since 2005. In that time, they’ve increased by 30%. That’s a compound annual growth rate (CAGR) of 1.35%.
Dividends, meanwhile, have also increased slowly over the last 18 years, climbing by a CAGR of just 0.16% in that time. Even so, it’s still growth — and stable growth, at that. Now, let’s see what kind of investment you would need to make.
| Year | Shares Owned | Annual Dividend Per Share | Annual Dividend | After DRIP Value | Annual Contribution | Year End Shares Owned | Year End Stock Price | New Balance |
|---|---|---|---|---|---|---|---|---|
| 1 | 2911.00 | C$0.86 | C$2,515.82 | C$42,198.33 | C$10,000.00 | 3787.18 | C$13.93 | C$52,738.29 |
| 2 | 3787.18 | C$0.87 | C$3,278.29 | C$55,605.61 | C$10,000.00 | 4698.88 | C$14.11 | C$66,317.58 |
| 3 | 4698.88 | C$0.87 | C$4,073.99 | C$69,879.66 | C$10,000.00 | 5647.01 | C$14.30 | C$80,774.95 |
| 4 | 5647.01 | C$0.87 | C$4,903.87 | C$85,061.20 | C$10,000.00 | 6632.47 | C$14.50 | C$96,151.66 |
| 5 | 6632.47 | C$0.87 | C$5,768.86 | C$101,192.30 | C$10,000.00 | 7656.14 | C$14.69 | C$112,490.35 |
| 6 | 7656.14 | C$0.87 | C$6,669.89 | C$118,316.39 | C$10,000.00 | 8718.92 | C$14.89 | C$129,835.01 |
| 7 | 8718.92 | C$0.87 | C$7,607.92 | C$136,478.28 | C$10,000.00 | 9821.69 | C$15.09 | C$148,231.05 |
| 8 | 9821.69 | C$0.87 | C$8,583.88 | C$155,724.16 | C$10,000.00 | 10965.33 | C$15.30 | C$167,725.28 |
| 9 | 10965.33 | C$0.88 | C$9,598.73 | C$176,101.64 | C$10,000.00 | 12150.72 | C$15.50 | C$188,365.93 |
| 10 | 12150.72 | C$0.88 | C$10,653.40 | C$197,659.78 | C$10,000.00 | 13378.70 | C$15.71 | C$210,202.72 |
| 11 | 13378.70 | C$0.88 | C$11,748.83 | C$220,449.07 | C$10,000.00 | 14650.15 | C$15.92 | C$233,286.80 |
| 12 | 14650.15 | C$0.88 | C$12,885.97 | C$244,521.47 | C$10,000.00 | 15965.90 | C$16.14 | C$257,670.84 |
| 13 | 15965.90 | C$0.88 | C$14,065.74 | C$269,930.44 | C$10,000.00 | 17326.79 | C$16.36 | C$283,408.99 |
| 14 | 17326.79 | C$0.88 | C$15,289.09 | C$296,730.91 | C$10,000.00 | 18733.63 | C$16.58 | C$310,556.93 |
| 15 | 18733.63 | C$0.88 | C$16,556.93 | C$324,979.36 | C$10,000.00 | 20187.23 | C$16.80 | C$339,171.87 |
| 16 | 20187.23 | C$0.89 | C$17,870.18 | C$354,733.76 | C$10,000.00 | 21688.39 | C$17.03 | C$369,312.58 |
| 17 | 21688.39 | C$0.89 | C$19,229.75 | C$386,053.65 | C$10,000.00 | 23237.88 | C$17.26 | C$401,039.37 |
| 18 | 23237.88 | C$0.89 | C$20,636.56 | C$419,000.11 | C$10,000.00 | 24836.46 | C$17.49 | C$434,414.14 |
| 19 | 24836.46 | C$0.89 | C$22,091.48 | C$453,635.81 | C$10,000.00 | 26484.87 | C$17.73 | C$469,500.40 |
| 20 | 26484.87 | C$0.89 | C$23,595.40 | C$490,024.97 | C$10,000.00 | 28183.85 | C$17.97 | C$506,363.23 |
| 21 | 28183.85 | C$0.89 | C$25,149.19 | C$528,233.44 | C$10,000.00 | 29934.10 | C$18.21 | C$545,069.34 |
| 22 | 29934.10 | C$0.89 | C$26,753.72 | C$568,328.63 | C$10,000.00 | 31736.30 | C$18.45 | C$585,687.06 |
| 23 | 31736.30 | C$0.90 | C$28,409.83 | C$610,379.59 | C$10,000.00 | 33591.13 | C$18.70 | C$628,286.37 |
| 24 | 33591.13 | C$0.90 | C$30,118.35 | C$654,457.01 | C$10,000.00 | 35499.22 | C$18.96 | C$672,938.87 |
| 25 | 35499.22 | C$0.90 | C$31,880.11 | C$700,633.16 | C$10,000.00 | 37461.20 | C$19.21 | C$719,717.84 |
| 26 | 37461.20 | C$0.90 | C$33,695.89 | C$748,982.01 | C$10,000.00 | 39477.67 | C$19.47 | C$768,698.20 |
| 27 | 39477.67 | C$0.90 | C$35,566.50 | C$799,579.14 | C$10,000.00 | 41549.21 | C$19.73 | C$819,956.57 |
| 28 | 41549.21 | C$0.90 | C$37,492.70 | C$852,501.80 | C$10,000.00 | 43676.37 | C$20.00 | C$873,571.22 |
| 29 | 43676.37 | C$0.90 | C$39,475.23 | C$907,828.91 | C$10,000.00 | 45859.67 | C$20.27 | C$929,622.12 |
| 30 | 45859.67 | C$0.91 | C$41,514.84 | C$965,641.05 | C$10,000.00 | 48099.61 | C$20.54 | C$988,190.95 |
| 31 | 48099.61 | C$0.91 | C$43,612.24 | C$1,026,020.47 | C$10,000.00 | 50396.67 | C$20.82 | C$1,049,361.05 |
| 32 | 50396.67 | C$0.91 | C$45,768.12 | C$1,089,051.13 | C$10,000.00 | 52751.30 | C$21.10 | C$1,113,217.50 |
As you can see, even with this slow growth, it would take 32 years to reach $1.1 million! That’s with an investment of $40,000 to start and adding $10,000 each year. So, you get $1.1 million from a $360,000 total investment — all while being able to sleep peacefully at night.
