Dividend stocks can be an excellent source of passive income for any Canadian. Yet find the right dividend stock and can turn your regular monthly contributions into enormous amounts of long-term passive income.
That’s why today we’re going to look at dividend stock all-star Chemtrade Logistics Fund (TSX:CHE.UN) to discuss its potential for riches beyond belief.
Why Chemtrade
Chemtrade is a dividend stock investors have long looked towards for passive income. The company provides industrial chemicals and services across Canada, the United States, and South America. These industrial chemicals aren’t just your average cleaning supplies. Instead, they’re used to clean the water we drink, the gas we use, and even the homes we build.
That makes this dividend stock an incredibly stable source of income. It provides essential products to countries around the world, with a wide range of chemicals that we will need for the foreseeable future. Furthermore, it’s been proving its worth as of late.
Earnings beat
Chemtrade stock reported record results in August as the company soared past earnings estimates for the second quarter. The company reported record annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance of at least $450 million for 2023.
Revenue increased 5% year over year to $470 million, with net earnings up 151% compared to last year to $87.3 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter were up 76%, the highest quarterly adjusted EBITDA in the company’s history. Cash flow increased 42%, and its balance sheet saw major improvements.
The dividend stock was, therefore, able to reiterate its record level of guidance for the year. Furthermore, it lowered its capital expenditure guidance to between $70 and $100 million, down from $110 to $140 million!
A chance to get rich
The thing is, this dividend stock continues to be quite valuable. Shares are still down about 3% in the last year as of writing, and it trades at just 5.76 times earnings. It also offers a substantial 9.6% dividend yield — a yield that is bound to decrease as the stock climbs higher.
That’s why now is the perfect time for investors to get rich off this dividend stock. Investors can see just how much they could get in returns should the company achieve its consensus potential price target of $11.57 from a $5,000 investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL |
| CHE.UN – now | $8.35 | 599 | $0.60 | $359.40 | Monthly | $5,000 |
| CHE.UN – target | $11.57 | 599 | $0.60 | $359.40 | Monthly | $7,289.83 |
With both returns and dividends taken into consideration, the dividend stock could hand over returns of $2,289.83! That’s just in a year’s time, should analysts be correct. Hold even longer, and this dividend stock could certainly make investors rich in the next few decades — all from a stock that will remain essential in the coming years.
Bottom line
A great dividend stock can be hard to find. Yet when it comes to Chemtrade, it’s a monthly dividend payer that’s been around for years and will remain for years more. With plenty of cash on hand, record results, and an ultra-high dividend yield, it’s certainly a stock that should remain on your radar.
