When we discuss stocks, they tend to fall into two categories. First, they might be a strong dividend player that can provide you with a long future of passive income. Second, they might be a good growth stock you can buy for superior returns in the future.
But what if you could have both?
That’s why today we’re going to look at Onex (TSX: ONEX), a powerhouse dividend producer with a future outlook of growth as well. So, let’s look at these top two reasons to buy it in bulk.
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1. Growth!
While the past doesn’t necessarily mean the future will be perfect, Onex stock has a strong history of successful acquisition completion as well as a growing portfolio. The company continues to focus on undervalued businesses that it can pick up with strong future growth potential. And it’s been quite successful at this.
This strategy, even during the most trying times, has yielded strong results, generating huge returns for investors. That’s all thanks to a strong management team that has been with Onex stock for years, even decades. They’ve managed to create a diversified portfolio across various sectors and industries. This has helped the stock grow while also bringing down risk.
In recent years, the company has invested more in high-growth areas as well. This includes the healthcare and technology sectors. Both of these areas are set for more growth in the future as well.
In fact, we saw even more growth during Onex stock’s latest quarter. The fourth quarter brought in net earnings of $1.03 billion, or $1.28 per diluted share. This was nearly double what it achieved last year. For the year, the company grew to $3.84 billion from $3.21 billion as well. But best of all, the company looks to have solid long-term prospects, with a strong deal pipeline that will likely bring in more growth.
2. Dividend
Now, there really should be a middle ground between Dividend Aristocrats and Dividend Kings. Dividend Aristocrats in Canada are those stocks that have increased their dividend each year for the last five years or more. Dividend Kings have increased dividends for 50 years or more. So, what if you fall somewhere in between?
That’s where Onex stock is. The company has paid out a dividend each year for the last 37 consecutive years. While it hasn’t always increased the dividend, it’s still held steady. So, you can be sure that even during trying times, you can continue to see dividend payments come from this stock.
Granted, a lot of the company’s cash is going to be used for acquisitions. But that’s why you want to consider both passive income through dividends and returns from Onex stock. Right now, you can bring in a dividend of $0.40 per share annually. This comes to a dividend yield of 0.39%. Meanwhile, it trades at just 10.41 times earnings, offering a great deal on the TSX today. So, if there’s one company to consider buying in bulk, Onex stock looks like it could be it.
