Finding a great dividend stock is perhaps one of the best thing investors can do right now. You can grab onto passive income that perhaps can come in even every month! That is certainly excellent during a downturn that continues to keep the TSX down.
However, there’s also finding a great dividend stock that’s on the rise. In this case, you’re receiving passive income both through dividends as well as through returns. Yet there’s one right now I’d perhaps consider before all others.
Parkland stock
Parkland (TSX:PKI) shares are on the rise lately. Year to date, shares of the fuel dividend stock are up 18% as of writing. It currently offers a dividend yield as well at 4.01% — a pretty solid payout.
Even with those benefits, Parkland stock remains fairly cheap. The dividend stock trades at just 16.85 times earnings as of writing, which is just shy of value territory. Therefore, it’s definitely one investors will want to consider on the TSX today — especially given its long-term trajectory.
Let’s get into that next.
Why this stock?
Parkland stock distributes and markets refined fuels and other petroleum products as well as lubricants. Most recently, however, there has been an increase in performance that has led to the climb in share price.
When earnings came out in May, Parkland stock announced it earned $77 million in the first quarter of 2023. This was an incredible 40% increase from the $55 million back in 2022. The fuel and convenience store operator also said sales and operating revenue were up 7.2% to $8.2 billion as well.
Diluted earnings increased 23% from the year before, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) down 12.6% in Canada. However, its international adjusted EBITDA more than doubled to $183 million.
Yet that wasn’t all. Parkland stock went on to announce that it has a goal of $2 billion in adjusted EBITDA by the end of 2025 — and that’s without more acquisitions.
Analysts react
Analysts increased their target prices for Parkland stock after the strong earnings report. What’s more, several also moved it from a hold to a buy position, marking the stock as a value play given the future outlined by management.
Furthermore, analysts believe the stock will outperform the rest of its sector, as the stock continues to go through its transition. The near-term focus on reducing leverage and optimizing its business as is, will certainly help in this endeavour. This means taking a pause on inorganic growth through acquisitions, said one analyst. Yet the dividend stock still plans on achieving that $2 billion adjusted EBITDA.
As the dividend stock continues to climb towards its 52-week highs yet again, investors would do well to pick up the stock these days. Parkland stock looks like it’s making value plays that could certainly be beneficial for long-term investors. What’s more, you can bring in a solid dividend yield at rates that may not be around in just a few months. The choice is yours.
