While many tech stocks are flying high lately, even amid the ongoing macroeconomic uncertainties, we can’t deny the possibility of a near-term market pullback. To prepare for that possibility, it makes sense to diversify into dependable dividend stocks that can continue paying regardless of short-term market swings.
With just $7,000 invested, you could be earning $359 a year — not from a risky pick, but from a company most Canadians recognize instantly. This investment could do all the heavy lifting for you, while you enjoy the returns without lifting a finger. In this article, I’ll talk about A&W Food Services of Canada (TSX:AW), a top Canadian dividend stock that could help you earn reliable passive income for years.
This reliable dividend stock could boost your income
If you’re not familiar with it, A&W is best known for its frosty root beer and iconic burgers. However, behind that familiar brand is a business that consistently generates stable cash flow and rewards its shareholders generously.
The company is the second-largest quick-service hamburger chain in Canada, with over 1,080 restaurants from coast to coast. It operates under a franchisor model, meaning it collects steady royalty-like fees from franchisees, rather than taking on the cost of running all the stores itself. This business model helps A&W keep margins healthy and earnings more predictable — a big plus for dividend investors.
After climbing by nearly 21% over the last eight months, A&W stock currently trades at $37.34 per share, giving it a market cap of about $896 million. It pays a quarterly dividend, which translates to an annualized yield of 5.1%. If you invest $7,000 today, you could collect roughly $359 every year from its reliable dividends — and that doesn’t even include its share price growth potential over time.
Solid numbers despite economic uncertainties
A big reason for the recent steady climb in A&W stock is investor confidence in its dependable cash flow and dividend. Plus, with interest rates expected to ease in the coming months, high-yield stocks like A&W become even more attractive to income-focused investors.
In the third quarter, the company’s revenue came in at $71.2 million, which was slightly lower than a year ago, as it opened fewer new restaurants during the period. But this revenue figure doesn’t tell the whole story.
Despite the drop in revenue, A&W’s profit before taxes surged by 163% YoY (year-over-year) in the latest quarter to $23.6 million. This eye-popping growth was driven by its lower marketing-related costs and the elimination of royalty expenses following a major business restructuring.
During the quarter, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 5% YoY to $25.8 million. Its profit margin also expanded sharply with the help of better cost efficiency and stronger performance across its franchised restaurants.
A&W’s long-term strategy makes it a top dividend pick
Interestingly, A&W’s long-term growth plan focuses on a simple but effective formula of expanding its restaurant count, boosting average sales per location, and improving franchisee profitability. And it’s making solid progress on all fronts.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND PER SHARE (QUARTERLY) | YEARLY PAYOUT |
| A&W Food Services of Canada | $37.34 | 187 | $6,983 | $0.48 | $359 |
| Prices as of Dec 16, 2025 |
The company is currently partnered with Suncor to open new locations inside Petro-Canada gas stations, with over 90 new restaurants committed between 2024 and 2027. At the same time, it continues to refresh its menu with value-driven options like its under-$4 value deals, while also investing to bring in more traffic and boost average ticket sizes.
With a growing footprint, scalable franchise model, and strong brand loyalty, A&W has the ability to keep its dividend intact – and growing – in the years to come. That’s why this top Canadian dividend stock could be a smart addition to your portfolio.
