Price fluctuations determine the profit or loss of a stock investment. However, dividend investing is the way to go if the objective is to create recurring income streams. Dividends are buffers as they compensate for or limit losses during market downturns. Moreover, you can meet your liquidity or immediate cash needs.
Yields vary depending on the company’s financial performance or ability to generate income to support dividend payments. While many dividend-paying Canadian companies are excellent income sources, income-focused investors need a defensive holding in a tariff-plagued environment.
Rogers Sugar (TSX:RSI), a consumer staple stock, stands out as a pure-dividend play. You won’t see wild price swings (between $5 and $6.50), but you can expect consistent passive income. At $5.49 per share, the dividend offer is a juicy 6.63%. Regarding its track record, RSI hasn’t missed a quarterly dividend payment since 2000.
Business overview
The $695.4 million company refines, packages, markets, and distributes sugar, maple, and related products in Canada, the U.S., Europe, and other international markets. Sugar is a low-growth but enduring business, evidenced by the 135-year corporate existence of Rogers Sugar.
Whether for home or business, Rogers’s business products consist of sugar and sugar alternatives. The company supplies premium ingredients for large-scale recipes and production to various clients in the food and beverage, industrial, and pharmaceutical sectors. Household or retail clients can access high-quality sugar and all-natural sweetener solutions.
Expansion and modernization
The acquisition of L.B. Maple Treat Corporation in 2017 enabled diversification into the growing maple syrup market and expansion of the business portfolio. A business renaissance is underway through a $300 million expansion project or LEAP. The project aims to modernize the sugar cane refinery in Montreal, Quebec.
In addition to the approximately 100,000 metric tonnes of incremental refined sugar capacity, LEAP includes logistic assets for increased delivery capacity to the Ontario market. The project could be in service by year-end 2026.
Strong start to 2025
Sugar and maple syrup volumes in the first quarter (Q1) of 2025 rose 7.51% and 13% to 196,100 metric tonnes and 13,400 pounds, respectively, versus Q1 2024. Meanwhile, revenue and net earnings in the same quarter increased 12.72% and 14% year over year to $323.2 million and $15.81 million.
Mike Walton, president and chief executive officer of Rogers and Lantic Inc., its operating subsidiary, said, “We are pleased to have made a strong start to the year, delivering profitable growth in both our Sugar and Maple segments. By harnessing the strength of our markets and focusing on delivering excellent service to our customers, we have been able to drive growth in revenues, margins and free cash flow.”
The free cash flow of $86.2 million as of December 28, 2024, represents a 94.58% jump from a year ago. According to Walton, a combination of debt, equity, existing operating cash flow, and Roger’s revolving credit facility will fund the LEAP Project. The construction phase has commenced.
Should you buy RSI?
Rogers Sugar should overcome U.S. tariff threats owing to the strong demand for and pricing of sugar. More importantly, the consumer staple stock is a buy if you want consistent, uninterrupted cash inflows. 2,000 RSI shares ($10,980 investment) would produce $181.99 quarterly passive income.
