Could This Send A&W’s Stock Soaring?
A and W Revenue Royalties Income Fund (TSX:AW.UN) is reinventing its veggie patty, and it could be a big hit. The company is going to use plant-based patties from Beyond Meats, a company that has some big celebrity investment behind it, which includes the support of Leonardo DiCaprio and Bill Gates.The burger is meant to be similar to a beef burger, but with it being a much healthier option.
A&W has long positioned itself as a company that uses healthier ingredients in its burgers as it tries to appeal to more health-conscious customers that want to eat healthy while still being able to indulge in their favourite foods.
The stock needs a boost as it is has declined by 7% in the past 12 months and over the last six months it down 4%.
However, the drop in price has given its dividend yield a boost, as currently A&W pays its shareholders a dividend of 5%, which is distributed out in monthly installments. If you were to invest $50,000 in the stock, you would earn a monthly dividend of over $200, giving your portfolio a lot of recurring cash flow.
The stock is a little expensive buy as it trades at a price-to-earnings multiple of 20.4 and is valued at four times its book value. However, there is still plenty of room for the company to grow as over the past four years A&W has seen its revenue rise by 38%, averaging an annual growth rate of 8.5% during that time.
A&W is one of the most well-known fast-food chains around the world and with a focus on quality, it’s in a good position to take advantage of a growing trend where consumers are giving more thought to what they eat. It’s a great long-term buy for investors that are looking for stability and growth in the years to come.