3 Restaurant Stocks With Above Average Dividend Yields
- August 10, 2010
- Dividend Aristocrats, Dividend Investing, Dividend Stocks, Top Dividend Stocks
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Ah, the wonderful days of summer. Warm weather and vacations seem to monopolize our thinking. And with the market staging a nice summer rally, investors can spend less time worrying about their portfolio and more time enjoying the sun this summer.
Summer vacations are an American ritual. A time to forget about work problems, family problems, money problems, etc. Well, you can at least forget about some of them for a while.
Vacation time also gives you a unique perspective for selecting stocks to buy. For example, are hotels totally booked or are you able to get dirt cheap deals? When you’re out shopping is there one store that is just packed with customers or is there some product that is just flying off the shelves? How about when you go out to eat – which restaurants are habitually crowded nearly every night?
These are all great investment signals that you should be aware of. For dividend investors, here are 3 restaurant stocks with above average dividend yields that you should pay attention to.
McDonalds
With a $78 billion market cap, McDonald’s (MCD: 99.99 -0.06%) is a giant among restaurant stocks. However, despite their size MCD consistently delivers impressive results. Most recently the fast food chain’s new frappe and smoothie line has been ringing up sales. Last month, the hot weather and cool drinks fueled a 5.7% same store sales (SSS) increase – the largest increase since July 2008.
Yield: 3.0%
Darden Restaurants
Darden (DRI: 49.42 +0.59%) owns the popular Red Lobster and Olive Garden restaurants. The wait time to get a table at these two popular eateries has increased this summer as consumers flock to their restaurants. Although Darden did report disappointing earnings results last quarter, the restaurant stock increased their dividend by 28% and Wall Street expects earnings this quarter to jump 15%.
Yield: 3.0%
Brinker International
Brinker (EAT: 27.45 +0.81%) has had their ups-and-downs recently, but last month they sold off their On The Border restaurants in order to focus more attention on their core Chili’s concept. This is a positive development for the company, since Chili’s already accounted for 80% of their operating profits. This increased focus on profitability has already enabled Brinker to increase their quarterly dividend.
Yield: 3.5%
We are also going to include a bonus dividend stock for this feature – Starbucks (SBUX: 49.20 +0.99%). Starbucks initiated their dividend program in March, and so the stock is relatively new to the dividend world. The stock also yields only 2.0% which can only be considered average in the market environment. However, last month SBUX rewarded investors with an unexpected dividend increase. Investors should take notice of the coffee retailer’s willingness to increase their dividend.
