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Summary
- Dividends offer investors a reliable source of income, similar to the interest earned when keeping funds invested for an extended duration.
- Dynacor Group Inc., a gold ore processing company, declared a dividend of CA$0.01 per common share for October.
- K-Bro Linen, a laundry processing company, declared a September dividend of 10 cents.
Dividend stocks refer to companies that consistently share their profits with shareholders through dividend payments and have a known history of doing so.
Dividends provide investors with a consistent income stream, much like the interest earned when holding money over an extended period. In the face of rising inflation, investing in dividend stocks, especially those with robust dividend growth, can serve as a defense to mitigate its impact.
Dividend stocks are typically sturdy and reliable companies that experience less market volatility and are less likely to undergo dramatic price fluctuations.
ALSO READ: Two TSX-listed retail stocks surpassing market gains
With that, here are two dividend stocks that investors can examine:
Dynacor Group Inc. (TSX:DNG)
Dynacor specializes in processing industrial gold ore while providing dividends to its investors. The company's primary focus is on gold production.
In Q2 2023, Dynacor achieved promising results, including a record production of 32,693 AuEq ounces and quarterly sales totaling US$64.5 million. The net income for the quarter was US$4.5 million (equivalent to US$0.12 per share).
This performance marked a significant improvement over Q2 2022, where the company recorded sales of US$53.9 million and a net income of US$2.6 million. This represents a substantial net income growth of 73.1% compared to Q2 2022.
Dynacor’s cash on hand was US$30.1 million at the end the second quarter this year, as against US$25.6 million at year end 2022. For October 2023, DNG declared a dividend of CA$0.01 per common share, payable on October 19, 2023.
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Based on Tuesday's closing price of CA$3.21, DNG has a dividend yield of 3.74% and a P/E ratio of 6.84x. At Tuesday’s close, DNG rose by 2.56% on an intraday basis and by 7% on YTD basis.
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K-Bro Linen Inc. (TSX:KBL)
K-Bro Linen specializes in processing laundry and linen for the healthcare and hospitality sectors. It offers management services and processes linens used in hospitality, healthcare, etc.
K-Bro’s consolidated revenue experienced a 13.9% rise in Q2 2023, as compared to Q2 2022, with healthcare revenue seeing a 4.4% uptick and hospitality revenue surging by 29.0%.
During Q2 2023, EBITDA showed substantial growth, increasing by CA$4.8 million to reach CA$14.5 million, compared to the CA$9.7 million recorded during the same period in 2022. This represents a 49.8% increase.
Net earnings in Q2 2023 also exhibited notable growth, rising by CA$3.1 million to CA$4.7 million when compared to the CA$1.6 million earned during the corresponding period in 2022. Additionally, as a percentage of revenue, net earnings increased by 3.5 percentage points, reaching 5.8%.
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K-Bro will be paying its shareholders a dividend of 10 cents on October 13, 2023.
Based on Tuesday’s closing price of CA$31.02, KBL has a dividend yield of 3.87% and a P/E ratio of 37.07x. At Tuesday’s close, KBL was 4.55% lower on an intraday basis, while being 11.38% higher on a YTD basis.
