Collins Foods' HY26 Earnings and Dividend Strategy: A High-Yield Buy for 2026

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If you're looking for a high-yield stock that combines explosive revenue growth with a shareholder-friendly dividend strategy, Collins Foods (ASX: CKF) is a no-brainer. The company's HY26 earnings report has just lit the fuse on a compelling investment opportunity, and here's why you should act fast.

Revenue Growth: A Rocket Ship Powered by KFC and Global Expansion

Collins Foods delivered a stunning performance in the first half of fiscal 2026, with revenue . This wasn't just a one-trick pony-KFC Australia drove the bulk of the growth, while European operations rebounded earlier than expected. Underlying EBITDA jumped , and net profit after tax (NPAT) soared .

But the real fireworks are coming from Germany. Collins Foods is aggressively expanding its KFC footprint there, with plans to open . This isn't just about incremental sales-it's about capturing market share in a region where fast food demand is surging. Combine that with digital upgrades to enhance customer experience, and you've got a recipe for sustained growth.

Dividend Strategy: A Gold Mine for Income Investors

Let's talk about the elephant in the room: Collins Foods' . The company just declared a fully-franked interim dividend of , and its 2025–2026 dividend schedule is already set in stone. The interim payout is expected to be declared on December 8, 2025, with a payment date of January 5, 2026, while the final dividend will follow on July 7, 2026, payable by August 4, 2026.

Now, I know what you're thinking: "A payout ratio of ? That's unsustainable!" But here's the twist: Collins Foods isn't relying on earnings alone. Its , and it's sitting on . Even with a debt-to-equity ratio of 63.8%, the company's cash flow covers its debt obligations . This isn't a company stretching to pay dividends-it's a cash machine.

Critics might point to the , but let's not lose sight of the big picture. Collins Foods has reduced its net debt by , and its free cash flow has averaged . This isn't a company teetering on the edge-it's a business with the liquidity to weather any storm.

Moreover, the company's was fully funded by its robust cash reserves. With underlying NPAT growth projected at , Collins Foods is poised to not only maintain but potentially increase its payouts.

The Bottom Line: A High-Yield Buy for 2026

Collins Foods is a rare gem in today's market: a high-yield stock with a track record of , explosive revenue growth, and a balance sheet that can handle any headwinds. While the payout ratios may look daunting, the company's cash flow generation and strategic investments in Germany make this a risk-free play for income-focused investors.

If you're looking to capitalize on a stock that checks all the boxes-growth, dividends, and financial strength-Collins Foods is your answer. Don't wait for the market to catch up-this one's a winner.