3 Sizzling Dividends That Are Going On Sale Fast Food stocks have a trying time in 2023, and their shares are under pressure. The problem is not that the companies can’t grow because they are or that they can’t improve profitability because they are doing that too. The problem is that much of the growth was priced into the market, and macroeconomic clouds are on the horizon. The good news for long-term-oriented investors is that the weakness in share prices is opening up an opportunity for today. While these stocks' share prices are under pressure now, the companies and the industry is expected to grow this year and next, and they are gaining leverage. These businesses are also supported by robust growth efforts, including international expansions and a lean into digital that has them set up for leverage when economic conditions change. Until then, stocks like McDonald’s (NYSE: MCD), Wendy’s (NASDAQ: WEN), and Jack In The Box (NASDAQ: JACK) are high-quality dividend-paying stocks that can be relied on. As the current inflationary period propels various sectors, one stands out, ready to take off in a bull market – and history shows that this is a recurring trend.
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Inside this concise report, you'll discover the four compelling reasons why this sector is on the brink of going parabolic. Download the report instantly using this link. McDonald’s; The Industry Leader McDonald’s is the fast-food and restaurant stocks industry leader in more ways than 1. It is the largest chain of restaurants worldwide by several orders of magnitude and is growing fastest. The company posted an industry-leading 6.7% topline growth in Q2, compounding that by a widening margin. Margin and earnings growth was also the most robust in the industry and again compounded by a robust growth outlook. McDonald’s expects to open about 1,500 restaurants this year, worth about 3.7% of the store count. Assuming these stores align with the company averages, the outlook for 2024 growth is too low. Analysts expect only 6.7% company-wide growth, which implies comps of only 3% or so compared to the double-digit gains posted this year. Many, if not all, of the new stores will be in high-traffic locations and supported by the latest digital innovations. McDonald’s dividend is not the highest in the industry or the cheapest to buy, but it is the safest. McDonald’s pays about 2.1%, with the stock trading near 25X earnings. The company is a Dividend Aristocrat on pace for Kingship and pays only 56% of earnings. Earnings growth is expected to top the distribution CAGR this year and next, so increases will continue and do little to upset the cash flow or distribution increase outlook.
Wendy’s: The #2 Player In Burgers Wendy’s is the 2nd largest burger chain but still only a tenth the size of McDonald’s. And that is the opportunity; Wendy’s is leaning into a global expansion to underpin its growth. The company grew by only 4.6% in Q2 but widened its margin significantly and drove a 16% increase in bottom-line earnings. That’s great news for the dividend, which yields more than 4.6%, with shares trading at $21.30. The payout is high relative to earnings due to a recent distribution increase, but the growth outlook offsets this. The company upped the distribution payment in anticipation of store growth, wider margins, and balance sheet improvement expected to take hold over the next year.
Porter Stansberry warned of the 1998 banking crisis, the Dot Com blow up, and the 2008 financial collapse…
Today, he's issuing a different kind of warning. Full details here. Jack In The Box: It’s A Whole New Business Jack In The Box is not a new name in the investment world, but it is a new company now that CEO Darrin Harris is at the helm. His refocusing and growth efforts are driving widening margins and reinvigorating the brand. He’s signed agreements for 340 new stores in the last 3 years, with 308 left to be opened. That’s worth about 15% of store growth and just the beginning; an international expansion is in the works, and there is the Del Taco angle. It’s also growing, and synergies between the 2 brands are helping to drive margin. Regarding the dividend, JACK pays about 2.1% with shares near $83.75. Jack’s payment is among the safest at 28% of earnings, but don’t expect big increases, if any; the company is using its cash to grow. Written by Thomas Hughes Read this article online › Featured Articles: |
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