1 Dividend Stock Up 22% With a 5% Yield to Hold Forever

Sometimes the best dividend names look almost boring. They sell products people keep buying, pay cash to shareholders, and grind through economic cycles without much fuss. Rogers Sugar (TSX:RSI) fits that mould. It won’t excite investors looking for the next artificial intelligence (AI) winner. But for those who want steady income from a simple business, it deserves a closer look.

RSI

Rogers Sugar owns Lantic, one of Canada’s best-known sugar producers. It refines, packages, and sells sugar across the country. It also owns a maple products business. That gives it exposure to two very Canadian consumer staples. People may cut back on big purchases when money feels tight, but sugar still ends up in grocery carts, food manufacturing, baking, drinks, and packaged goods.

That steady demand helps explain the appeal. Rogers Sugar isn’t trying to reinvent itself every year. It focuses on margin, supply, refining capacity, and distribution. In a Tax-Free Savings Account (TFSA) or retirement account, that kind of simplicity can feel refreshing. Investors collect a quarterly dividend and let the business do what it has done for years.

Into earnings

The latest results also looked stronger than the revenue headline suggested. In the second quarter of fiscal 2026, consolidated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 10% to $38.3 million. Adjusted net earnings climbed 15% to $18.6 million. Those gains came even as lower sugar volumes and raw sugar prices pressured revenue, showing management can improve profitability even when sales aren’t at their highest.

The sugar segment did the heavy lifting. Adjusted EBITDA in that segment rose to $33.4 million from $27.6 million a year earlier. Rogers benefited from better margins, lower production costs, and improved product mix. Maple was weaker, with adjusted EBITDA falling to $4.8 million because of higher production costs and a softer mix. So this wasn’t a perfect quarter. But it was still a solid one.

Looking ahead

The dividend remains the main attraction. Rogers Sugar pays $0.09 per share each quarter, or $0.36 annually. Around a recent share price near $6.80, that works out to a yield of about 5.3%. That’s a useful income stream for investors who want cash flow without chasing the biggest and riskiest yields on the TSX.

The payout also has a long history. Rogers hasn’t delivered big dividend growth, and investors shouldn’t expect it to suddenly become a dividend-growth machine. The better case is stability. A steady 5%-plus yield can still do a lot of work when reinvested over years, especially inside a TFSA where the income and gains stay tax-free. Even now, this is what $7,000 could bring in.

COMPANY	RECENT PRICE	NUMBER OF SHARES	ANNUAL DIVIDEND	ANNUAL TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
RSI	$6.88	1,017	$0.36	$366.12	Quarterly	$6,996.96

The biggest catalyst is the LEAP project. Rogers is expanding sugar refining and logistics capacity in Eastern Canada, with plans to add about 100,000 metric tonnes of refined sugar capacity. The project carries a total expected cost of $280 million to $300 million and should enter service in the first half of 2027. If it goes well, Rogers could improve supply, serve more demand, and strengthen its long-term position.

Bottom line

Of course, “hold forever” should never mean “ignore forever.” Rogers faces risks from sugar prices, input costs, tariffs, project spending, debt, and weaker maple profitability. The LEAP project also needs careful execution. If costs climb or the timeline slips, investors could lose patience quickly, especially after the company already used financing to support the buildout.

Still, Rogers Sugar offers something many investors crave: a simple business, a healthy yield, and steady demand. It may not double overnight, but for patient income investors, that’s exactly the point over a very long holding period, starting now.

The post 1 Dividend Stock Up 22% With a 5% Yield to Hold Forever appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.