Rogers Communications Inc. (USA) (RCI), Darden Restaurants, Inc. (DRI): Three Growing and High Yielding Dividend Stocks

A growing restaurant chain

Darden Restaurants, Inc. (NYSE:DRI) is a restaurant chain operating around 820 restaurants under many brand names, including Olive Garden, LongHorn Stakehouse and Red Lobster. In the past ten years, Darden has been paying increasing dividends, from $0.08 per share in 2003 to $1.72 per share in 2012, marking an annualized growth rate of 35.9%. In the past twelve months, its dividend payment came in at $1.93 per share, with the payout ratio of 58.9%. Darden Restaurants, Inc. (NYSE:DRI) is trading at $51.50 per share, with a total market cap of $6.7 billion. The market values Darden at around 8.9 times its EBITDA. At the current trading price, Darden offers its shareholders quite a juicy dividend yield of 4.3%.

Looking forward, Darden Restaurants, Inc. (NYSE:DRI) seems to be optimistic about its near term future. For the full year 2014, the company estimates that its operating cash flow could be higher than the operating cash flow of $950 million in 2013, thanks to comparable store sales growth, higher margins and new unit growth. The unit growth is expected to be around 3.7% with the 80 new restaurants being opened by the end of 2014. It also expected to have 4%-6% growth in adjusted EPS, due to the lower acquisition and purchasing accounting cost for Yard House acquisitions.

My Foolish take

All three stocks, with their good historical dividend growth, decent payout ratio and low valuation, could fit well into investors’ income portfolios. Among the three, I like Darden Restaurants, Inc. (NYSE:DRI) the most because the company could experience good growth in its operating performance in the next year, with higher operating cash flow and higher EPS. Moreover, investors could get quite a decent yield at its current trading price.

The article Three Growing and High Yielding Dividend Stocks originally appeared on Fool.com and is written by Anh Hoang.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Rogers Communications Inc. (USA) (NYSE:RCI). The Motley Fool owns shares of Darden Restaurants. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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