Summer is here! As is often the case during this time of year, investors will often implement one of a few “seasonal” investing strategies. However, this isn’t just another fiscal year…
It’s been a wild first half of 2023, in fact, with significant changes having a seamless impact…
And with all of that excitement on Wall Street comes uncertainty. If one is looking for a safe investment space to help ensure a stress-free summer vacation, dividend stocks are one way to go.
Today, I’m looking at dividend payers with more to offer than their payouts alone. But, especially when you need a break from the chaos, those checks are pretty damn great, aren’t they?
It’s time to cover these three dividend tickers, indicating a safe, stable summer. Join me:
Restaurant Brands Inc (QSR)
Restaurant Brands Inc. (QSR) is known for owning and operating three popular chains: Tim Horton’s, Burger King, and Popeye’s. Investing in QSR would be a good move for the sake of its growth potential, rising dividends, and commitment to its shareholders, its community, and the environment, not to mention its persistent global reach in the fast-food industry.
With a 0.55 beta—making it safe from the broader economy’s volatility—and a very lucrative ROE (return on equity) of 41.69%, QSR stock is currently up 14.16% YTD. QSR has $6.64 billion in TTM (trailing twelve-month) revenue at $3.31 per share, making $1.01 billion in profit through its 15.26% net margin. At its most recent earnings call, QSR exceeded analysts’ projections, most notably on EPS, where it reported $0.75 per share vs. $0.64 per share expected (a 17.76% surprise). QSR also beat by 1.97% on revenue, showing year-over-year growth of 9.38%. QSR currently pays an annual dividend yield of 2.92% at a quarterly payout of 56 cents ($2.24/yr) per share, with a 66.36% payout ratio. With a free cash flow of $1.16 billion and a 10-day average volume of 1.18 million shares, QSR has a median price target of $78.05, with a high of $85 and a low of $66; this represents an upside potential of 7% and higher. Buy and Hold.
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Realty Income Corp (O)
Amidst the uncertainty, here’s a perfect little gift: a monthly dividend stock trading below fair value. Offering stability and room for growth, Realty Income (O) doesn’t have much in the way of theatrics but instead shows unmatched fortitude. While the others on this list pay dividends quarterly, O is well-known for its generous monthly dividends, which it has also increased for over 100 consecutive fiscal quarters.
O’s stock is, as mentioned, consistent, so I’ll point to that with some numbers: Slightly down YTD by 2.45% with a generalized 12-month asset growth of 15.98% and an 0.80 beta score, O’s enterprise value of $57.93 billion vs. its $40 billion market cap shows that there’s “a lot to the company,” if you will. O shows $3.47 billion in TTM revenue at $1.42 per share, from which it profited $895 million in net income via its 25.77% profit margin. To further evidence its stability, here are arguably the most exciting numbers: O’s annual dividend yield is 4.98%, and it offers shareholders a monthly payout of 25 cents ($3.00/year) per share on a very generous 210.35% payout ratio. With $1.81 billion in free cash flow and a 10-day average volume of 4.37 million shares, O’s average price target is $69.71, with a high of $74 and a low of $66. From where O’s price sits now, the range represents a nearly 15% increase. Buy and Hold.
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Devon Energy Corp (DVN)
Devon Energy (DVN), a U.S.-based oil and gas firm, recently faced a 13% decline amid falling oil prices. However, the future looks promising for DVN as oil prices are expected to rebound. DVN has shown insider confidence and ongoing stock ownership, while the management’s 50% expansion of the share buyback program underscores the stock’s appeal. With efficient operations and secure assets, DVN’s stock is an excellent opportunity for investors to benefit from its attractive valuation and dividend yield. Stock-wise, DVN is down YTD by 12.32% but has plenty of breathing room for price appreciation. DVN boasts a stunning ROE (return on equity) of 58.90%, a PEG (price/earnings/growth) ratio of 1.54x, a P/S (price to sales) ratio of 1.70x, and a P/B (price to book) ratio of 2.93x. During its MRQ (most recent quarter) earnings call, DVN met analysts’ revenue forecasts. Still, regarding EPS, it reported $1.46 per share vs. the $1.40 per share expected (a 4.62% surprise), also showing YOY EPS growth of 3.38%. DVN has a 10.46% annual dividend yield, with a quarterly payout of 72 cents ($2.88/year) per share, riding its 64.09% payout ratio. With an operating free cash flow of $8.37 billion and a 10-day average trading volume of 8.57 million shares, DVN has a median price target of $64.32, with a high of $82 and a low of $49. This range offers a more than 30% jump from DVN’s current pricing. Buy and Hold.
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