Buy 349 Shares of This Super Dividend Stock for $3,497/Year in Passive Income

This dividend stock has come under hot water in the recent past but could now be set up for massive gains in the near future.

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Dividend stocks are the best option for investors looking for a great stock to invest in these days. The market is starting to rebound, but until then, you want passive income that comes in regularly. And you want it now.

That’s why it’s a great time to find a super dividend stock that also has a strong outlook. This is why today we’re going to focus on Gildan Activewear (TSX:GIL).

Execution coming

There have been a lot of issues coming out of Gildan stock when it comes to their management team. Allegations have been placed against management that cast a shadow over the company’s bottom line. However, analysts now believe this has put Gildan stock in a valuable position.

The retailer has had a slew of issues, including special meetings to reinstate its former chief executive officer and replace eight of its 11 board members. However, Gildan management and board members do not want this reinstatement, alleging preferential treatment of some executives over others.

This is bad news, of course, for the retailer, but nothing to do with the company itself. This is why there will likely be near-term pain and long-term gains for investors, according to analysts.

All news is good news

The current press currently puts Gildan stock in the spotlight, even if it’s in a negative way. It does mean, however, that investors will continue to watch Gildan stock for positive movement. So, looking forward to the next year, there will likely be more pressure for results with a new chief executive officer (CEO) at the helm. Or, even if reinstated, the former CEO will have a lot to prove.

Therefore, no matter what, the stock is primed to grow its earnings per share in 2024. Revenue growth will continue thanks to organic and new growth opportunities. Lower inflation and interest rates will also lean into more spending. And the stock will continue to make share repurchases.

For now, shares trade at $43, with a consensus price target around $52. That would create a potential upside of 21% as of writing. So, what could you get from this dividend stock?

Bottom line

So, if you were hoping to create massive passive income from a dividend stock, it could be this one. Gildan stock holds a dividend yield of 2.3% as of writing, trading at just 12.1 times earnings as well. That dividend is far higher than the 1.46% average over the last five years as well. And with a payout ratio of 28%, that dividend isn’t going anywhere.

So, let’s say you had $15,000 to invest. Here is what that could get you in passive income.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
GIL – now$43349$1$349quarterly$15,000
GIL – highs$52349$1$349quarterly$18,148

In total, you’ll achieve passive income of $3,148 from returns and $349 from dividends. That’s a total of $3,497 in annual passive income! So, certainly consider this stock and gain not just dividend income but passive income on top.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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

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