3 Cheap Stocks That Offer Growth and Income in 2019
The Motley Fool
Published Jan 18, 2019 10:52
Updated Jan 18, 2019 11:06
Many investors think that growth and income are mutually exclusive. As growth stocks invest most of their profits in, well, growth, it’s believed that dividends are mostly the domain of stable blue chip stocks, or REITs. There is a certain amount of truth to that. Ultra high growth sectors like cannabis are less likely to pay dividends than more mature industries, such as banking. But that doesn’t mean you can’t find growth and income in one package.
In fact, the TSX abounds with stocks that are growing at or near double digits while also paying dividends. And these stocks just so happen to be among the best TSX performers overall. The first is a bank stock that almost everyone will be familiar with.
Toronto-Dominion Bank (TSX:TD)(NYSE:TD)
In its most recent quarter, TD’s adjusted EPS was $1.63, compared with $1.36 in the same quarter a year before. That’s a 19% growth rate. The company’s GAAP earnings growth was lower, but I’m inclined to favour the adjusted number here, as it excludes a non-recurring charge that won’t affect the company’s long term outlook. The company’s U.S. retail business grew especially well, at 44% year-over-year. TD still has plenty of room to grow in the U.S., so continued growth in that market could send overall growth higher. Despite all this growth, TD pays a dividend that yielded 3.9% as of this writing.
Canadian Tire Corp (TSX:CTC.A)
Canadian Tire is one of Canada’s most ubiquitous companies. Known for its retail stores, it has since branched out to clothing by buying up brands like Marks and Helley Hansen. In its most recent quarter, Canadian Tire’s revenue was up 11% , while net income was up 15% and diluted EPS was up 22%. That’s solid growth, but it doesn’t come at the cost of income: Canadian Tire paid a dividend that yielded about 2.82% at the time of this writing.
Alimentation Couche-Tarde (TSX:ATD.A)
Last but not least, we have Alimentation Couche-Tard, the operator of Couche-Tard and Circle K convenience stores. In its most recent quarter, revenue came in at $3.5 billion, an 11% increase over the same quarter a year before. Same-store sales also increased by 4.4% in the U.S., 4.6% in Europe and 5.1% in Canada.
This is a steadily growing enterprise, and it also pays a dividend: although the yield is low at 0.59%, it’s been steadily growing over the years. Alimentation is also noteworthy for having ended 2018 with a positive return, while the TSX shed 11.6% of its value in the same period. Over a five-year time frame, the stock has done even better, rising from $26.41 to $71.79 — a great performer by any stretch of the imagination.
Get The App
Bottom line
Growth investing and dividend investing needn’t necessarily be at odds. Although they can be hard to find, there are plenty of stocks posting double-digit growth while giving investors a cut of the proceeds. If you don’t want to compromise on either side of the growth/income dichotomy, any of the stocks mentioned in this article would be a worthy pick.
Fool contributor Andrew Button has no position in any of the stocks mentioned. Alimentation Couche-Tard is a recommendation of Stock Advisor Canada.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.