In at present’s unsure market, dividend shares that pay month-to-month have change into more and more engaging. For traders trying to clean out earnings and reinvest recurrently, the proper dividend-paying inventory is usually a sport changer. That’s the place Superior Plus (TSX:SPB) is available in. With a strong dividend and steady enterprise mannequin, it provides one thing uncommon on this local weather: dependable month-to-month money movement with room to develop. In the event you’re on the lookout for a reliable payout whereas nonetheless capturing long-term upside, Superior Plus may very well be value a more in-depth look.
The inventory
Superior Plus is one in every of North America’s largest distributors of propane and associated merchandise, with operations throughout Canada and america. It serves residential, industrial, agricultural, and industrial markets, making it a key participant in delivering heating and vitality options. It’s not a flashy tech inventory, however it’s important, and that’s a part of what makes it interesting. Its merchandise are in demand year-round, notably in colder areas the place propane heating is a necessity. That steady demand has helped gasoline constant monetary efficiency, even when broader markets have struggled.
The corporate’s enterprise mannequin helps its dependable dividend. Superior Plus pays shareholders a dividend of $0.18 yearly. As of writing, that interprets to a dividend yield of roughly 2.3%. The corporate has maintained its payout all through intervals of market volatility, providing traders peace of thoughts and predictable earnings. For retirees or anybody constructing passive earnings, that type of regularity is tough to beat.
The numbers
Superior’s most up-to-date earnings report reinforces the power of its operations. In Q1 2025, it posted adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) of $260.5 million, up 10.5% from Q1 2024. This was pushed by strong efficiency in its U.S. propane distribution enterprise and continued advantages from its “Superior Delivers” cost-saving program. Free money movement per share got here in at $0.94, which was a 54% enhance year-over-year. That type of money technology gives robust backing for the dividend and likewise provides the corporate flexibility to spend money on future progress.
One key power is how the corporate manages its capital. Throughout the first quarter of 2025, Superior Plus repurchased 6.2 million shares, returning capital to shareholders whereas additionally growing earnings per share (EPS). Share buybacks is usually a sensible transfer when finished sustainably, and in Superior’s case, they mirror an organization with sufficient money readily available to each make investments and reward shareholders. Its web debt-to-adjusted EBITDA leverage ratio improved to three.7 instances from 3.8 instances final yr, displaying a gentle method to monetary well being even whereas executing on progress plans.
Extra to come back
Talking of progress, Superior Plus continues to profit from its ongoing “Superior Delivers” transformation initiative. This multi-year technique is targeted on boosting operational effectivity and buyer satisfaction. The corporate goals to ship a further $70 million in EBITDA by 2027 by way of streamlined operations and smarter logistics. Early outcomes are already flowing by way of to earnings, and if that trajectory continues, shareholders may gain advantage from each elevated profitability and the potential for dividend will increase sooner or later.
One other space the place Superior Plus shines is in its defensive nature. It operates in an important service business, and its buyer base is diversified throughout sectors and areas. Throughout inflationary intervals or financial slowdowns, individuals nonetheless want warmth and vitality. That inbuilt demand creates a buffer towards broader market declines. It’s one purpose the corporate has been capable of proceed elevating or sustaining its dividend whereas different corporations have paused theirs.
Taking a look at valuation, Superior Plus shares commerce at a ahead price-to-earnings ratio that’s under many friends within the vitality distribution house. It’s not the most cost effective inventory on the TSX, however for an organization with robust free money movement, a sustainable payout, and a transparent path for progress, the valuation seems affordable. Particularly when factoring within the month-to-month earnings stream, which provides flexibility for reinvestment or bills.
Backside line
For earnings traders, consistency issues greater than hype. Superior Plus delivers that in spades. Its dividend is backed by actual property, steady demand, and a transparent operational plan. It doesn’t depend on speculative progress or market swings. As a substitute, it focuses on rising earnings and sharing them with traders. That makes it a sensible selection for any Canadian trying to earn money each month from their portfolio.
