Passive-income investors have so many options now that interest rates are hovering around their highest point in recent memory. Indeed, it’s a good problem to have as an investor who seeks juicy payments on a regular basis. On the front of risk-free assets, GICs (Guaranteed Investment Certificates) are hard to pass up, with rates at or around 5%. Further, bonds also look intriguing now that rates are off the floor and steadily climbing higher. Indeed, you do not need to take risks to score a historically decent return these days.
Despite the impressive yields of risk-free assets, I continue to stand by stocks. They’re the best wealth builders, especially for young investors who are willing to stay in markets for decades at a time.
Indeed, high-rate GICs and more attractive bonds are absolutely terrific for retirees or those who are close to hitting their retirement dates. But if you’re a millennial still a long way from retiring (25 years or more), I think it’s worthwhile to prefer the dividend stocks that can also provide something that GICs can’t: price appreciation.
At the end of the day, young investors should seek to grow their wealth and reinvest dividends or distributions where possible.
Of course, I’m not against spending some of the dividends you receive, given the ever-rising costs of living. Inflation was out of control over the past year. While it’s slowly being tamed, it still poses a problem for some. High rents, food prices, and all the sort have been a thorn in our sides.
In this piece, we’ll look at one restaurant stock that has growth and a pretty impressive yield. On a total-return basis (dividends and capital gains considered), I view the following name could outdo GICs with mouth-watering 5% rates. Of course, a recession is coming, and that could pave the way for a rocky time for stocks. Regardless, the following restaurant plays, I believe, are resilient enough to continue climbing.
Restaurant Brands International
Restaurant Brands International (TSX:QSR) is best known for being behind such fast-food brands as Tim Hortons, Burger King, and Popeyes Louisiana Kitchen. The company’s latest addition to the portfolio, Firehouse Subs, is an intriguing wildcard that could evolve into something big one day. For now, though, it’s all about the big trio. And of late, they’re looking quite impressive, with Burger King scoring solid results driven by impressive strength in the Whopper.
As Restaurant Brands spends to improve comparable sales, look for it to explore expansion possibilities in new markets. The firm seeks to bring Firehouse Subs international. The move is less of a needle mover for QSR stock but could help really pad the results over the years. In any case, Firehouse Subs is a low-risk/high-reward brand that represents another smart acquisition by Restaurant Brands.
With a 2.95% dividend yield, QSR stock is a relative industry bargain that could offer growth and dividend growth over time. At less than 23 times trailing price to earnings, QSR stock is a great fast-food icon that could make for a wise addition to any long-term Tax-Free Savings Account fund.