The Motley Fool

4 delicious dividend stocks ready to buy

What could be better than getting your favourite snack from your local Brumby’s Bakery, Michel’s Patisserie or Crust Gourmet Pizza Bar? Surely the only thing would be investing in the company that owns those stores, so that every snack you buy goes towards its profits and contributes to the dividend payout every 6 months.

Luckily for those investors who want to invest in ‘what they can taste’ rather than Peter Lynch’s famous ‘invest in what you know’, there are a number of excellent companies listed on the ASX that own food outlets and pay big dividend yields.

The first is Collins Foods Ltd (ASX: CKF). Collins runs approximately 125 KFC restaurant franchises throughout Queensland and New South Wales, as well as owning and operating 30 Sizzler restaurants around Australia and is the franchisor of around 60 stores in South East Asia. Collins is up nearly 16% over the past 12 months and has a forecast yield of 5.3% fully franked, or 7.5% grossed up.

Retail Food Group Limited (ASX: RFG) has chased growth via a acquisition strategy for the past five years, purchasing a number of fast food chains to now control a stable of brands including Donut King, bb’s cafe, Brumby’s Bakery, Michel’s Patisserie, Esquires Coffee Houses (Australia & New Zealand), Pizza Capers Gourmet Kitchen, Crust Gourmet Pizza Bar and The Coffee Guy. Retail Food Group’s quality has been recognised by investors pushing the share price up 25% over the past 12 months. This has reduced the dividend yield, but it’s still healthy at 4.7% fully franked, or 6.7% grossed up.

Finally, Patties Foods Limited (ASX: PFL) offers a very different approach. Patties specialises in the manufacture and marketing of frozen food products to supermarkets, delis, and sporting venues. Brands sold include Herbert Adams, Patties, Patties Gluten Free, Nanna’s, Creative Gourmet, Four’n Twenty and Chefs Pride, which sell everything from sausage rolls and pasties, to frozen fruit, to beverages and desserts. Patties hasn’t delighted investors in the past 12 months, having fallen nearly 16%, but is now delivering a yield of 5.2% fully franked, or 7.5% grossed up.

Foolish takeaway

It doesn’t get much better than buying a pizza and the profit the company makes from it ending up in your pocket via a payout every 6 months. Patties Foods, Retail Food Group and Collins Foods all do this and pay investors a handsome return for their capital. They have all been solid performers and should continue to perform well, and pay out tasty dividends in the future.

Get our top dividend stock for 2014 – FREE!

Interested in our #1 dividend-paying stock? Discover The Motley Fool's favourite income idea for 2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2014."

Motley Fool contributor Andrew Mudie does not own shares in any companies mentioned

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.