7.5% Dividend Yield! I’m Buying and Holding This TSX Stock for Decades

Superior Plus Corp. (TSX:SPB) is a TSX stock that offers great value and a strong monthly dividend that should entice investors today.

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published May 9, 2023 4:45 pm EDT

The S&P/TSX Composite Index rose 43 points to open the week on Monday, May 8. Some of the best-performing sectors included battery metals, information technology, and base metals. Today, I want to zero in on a TSX stock that offers a mouth-watering dividend yield. This is the kind of stock investors might want to target in this turbulent market and economic environment. Let’s jump in.

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

How has this TSX stock performed over the past year?

Superior Plus (TSX: SPB) is a Toronto-based company that distributes and markets propane and distillates in the United States and Canada. Shares of this TSX stock have dropped 12% month over month as of close on May 8. The stock is now down 16% so far in 2023. Investors can see more of its recent performance by playing with the interactive price chart below.

Should investors be pleased with its recent earnings?

This company is set to release its first batch of fiscal 2023 earnings in the days ahead. In the fourth quarter (Q4) of fiscal 2022, Superior Plus delivered total revenue of $1.07 billion — up from $824 million in Q4 fiscal 2021. Meanwhile, gross profit surged to $429 million compared to $281 million in the prior year. EBITDA stands for earnings before interest, taxes, depreciation, and amortization (EBITDA). In Q4 2022, Superior Plus posted record adjusted EBITDA of $182 million — up from $142 million in the prior year.

For the full year, this company reported total revenue of $3.37 billion — up from $2.39 billion for the full year in fiscal 2021. Moreover, adjusted EBITDA climbed to $449 million compared to $398 million in the previous year. Net cash flows from operating activities rose to $248 million compared to $232 million in fiscal 2021.

Superior Plus management praised its recent earnings and laid out strong expectations for 2021 and 2022 on the back of recent acquisitions. Indeed, its acquisition of Certarus is expected to position Superior Plus for the green energy future that lies ahead.

The company also provided adjusted EBITDA guidance for 2023 and beyond. Superior Plus expects adjusted EBITDA in 2023 to be in the range of $445 million to $485 million.

Here’s why I’m looking to hold this TSX stock for the long haul

The recent bout of volatility has spurred some investors to chase passive income in a turbulent market. Fortunately, Superior Plus offers a chance to gobble up strong passive income for hungry investors. This TSX stock last announced a monthly dividend of $0.06 per share. That represents a very tasty 7.5% yield. Canadian investors can depend on a monthly dividend payout every single month if they scoop up Superior Plus in 2023.

The Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. This TSX stock last had an RSI of 31, putting Superior Plus just outside technically oversold territory. Its shares offer attractive value compared to its industry peers at the time of this writing. I’m looking to snatch up this undervalued TSX stock with a tasty dividend in the first half of May.