A robust labor market and deflating inflation have meant one thing for many consumers — going out to eat is back on the menu. Whether through quick service or casual restaurants, dining out has managed to gather the lion’s share of consumer spending in recent months. For firms like our latest Best Dividend Capture Pick, this has provided a tailwind for growth, cash flows and, ultimately, shareholder rewards.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick is uniquely positioned to benefit from the current environment. The reason? Our selection is one of the largest restaurant companies in the nation, operating several chains with over 2,000 locations. This extensive scale puts its eateries in most American cities and towns. Additionally, its large size enables it to achieve considerable cost savings on ingredients, labor, and other essential operations. The combination of high sales and above-average margins has resulted in solid profits and cash flow for the firm.
The best part is that, despite its massive size, our pick has consistently found ways to grow. This has included acquiring smaller chains that fit well under its umbrella and embracing several trends that have gained traction since COVID-19. These trends include takeout and at-home dining. Our pick has pulled in roughly $1 billion in takeout sales annually since the pandemic began. Add in a hefty dose of advanced technology, and you have a recipe for success.
As one of the top restaurant operators in the nation, our pick continues to attract investor support, making it an excellent dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Friday, January 10. our pick is well-positioned for this strategy, as is evident from its historical track record of a recovery period within an average of 4.3 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest restaurant play could be a lucrative option.
