5 Food Dividend Stocks On The Menu

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 |  Includes: BOBE, DRI, FRS, MCD, SYY
by: Dividend Dog

Sometimes conventional wisdom fails. For example, the restaurant industry is typically viewed as cyclical yet it has held up remarkably well over the economic downturn. Restaurants and restaurant supply stocks were screened for long-term return on equity, a history of dividend payments, and a history of dividend growth. The resulting companies have provided shareholder income and have grown shareholder wealth during the most challenging economic period since the great depression. Five companies are on the menu:

Darden Restaurants, Inc. (NYSE:DRI) recently traded at $43.21 per share. At this price level, the stock has a 4.0% dividend yield. For 10 out of the past 10 fiscal years, a share of DRI paid a total of $4.95 in dividends. Of these dividend payments, a total of $4.26 was paid in the last five years.

DRI shareholders have endured a -4.0% decline in share price over the past year. Shares of this mid-cap stock trade at a price-to-book ratio of 3.0, a price-to-earnings multiple of 12.8, and a price-to-sales multiple of 0.8 (trailing twelve months). At these price multiples, DRI is an attractive buy. Over the past decade shareholders saw a 23.1% average annual return on equity.

Bob Evans Farms Inc. (NASDAQ:BOBE) recently traded at $32.1 per share. At this price level, the stock has a 3.1% dividend yield. For 10 out of the past 10 fiscal years, a share of BOBE paid a total of $5.40 in dividends. Of these dividend payments, a total of $3.16 was paid in the last five years.

BOBE shareholders have seen a 0.3% change in share price over the past year. Shares of this small-cap stock trade at a price-to-book ratio of 1.4, a price-to-earnings multiple of 15.1, and a price-to-sales multiple of 0.6 (trailing twelve months). Over the past decade shareholders enjoyed a 9.0% average annual return on equity.

Sysco Corp. (NYSE:SYY) recently traded at $29.47 per share. At this price level, the stock has a 3.7% dividend yield. For 10 out of the past 10 fiscal years, a share of SYY paid a total of $7.05 in dividends. Of these dividend payments, a total of $4.55 was paid in the last five years.

SYY shareholders have seen a 4.0% change in share price over the past year. Shares of this large-cap stock trade at a price-to-book ratio of 3.7, a price-to-earnings multiple of 15.0, and a price-to-sales multiple of 0.4 (trailing twelve months). Over the past decade shareholders saw a 32.6% average annual return on equity.

McDonald's Corp. (NYSE:MCD) recently traded at $98.03 per share. At this price level, the stock has a 2.9% dividend yield. For 10 out of the past 10 fiscal years, a share of MCD paid a total of $10.53 in dividends.

MCD shareholders have seen a 31.6% change in share price over the past year. Shares of this large-cap stock trade at a price-to-book ratio of 7.5, a price-to-earnings multiple of 19.2, and a price-to-sales multiple of 3.8 (trailing twelve months). Over the past decade shareholders enjoyed a 20.9% average annual return on equity.

Frisch's Restaurants Inc. (NYSEMKT:FRS) recently traded at $19.9 per share. At this price level, the stock has a 3.2% dividend yield. For 10 out of the past 10 fiscal years, a share of FRS paid a total of $4.48 in dividends. Of these dividend payments, a total of $2.47 was paid in the last five years.

FRS shareholders have endured a -8.2% change in share price over the past year. Shares of this micro-cap stock trade at a price-to-book ratio of 0.8, a price-to-earnings multiple of 22.9, and a price-to-sales multiple of 0.3 (trailing twelve months). Over the past decade shareholders saw a 10.9% average annual return on equity.

These five restaurant stocks have persuasive histories of providing shareholder income and growing shareholder wealth. With the exception of DRI, investors should wait for more attractive valuations before buying these stocks. When valuations become more attractive, these stocks ought to be considered as members of a fixed income portfolio.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing.