Moving finished goods and raw materials around has always been a significant piece of the puzzle for many enterprises. But in the wake of the COVID-19 pandemic and now growing trade war, logistics has become even more important. Supply chains are ever changing amid the whims of geopolitics and other factors. For firms, such as our latest Best Dividend Capture Pick, that own and operate key logistics networks, the changing paradigm has only served to increase profits and revenues while benefiting shareholders.
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The key to our pick’s success is its near monopoly. Our pick happens to own one of the largest railroad networks in the United States. And thanks to consolidation over the decades, our pick is just one of a few railroads left in North America. Covering more than 26 states and into Canada, our pick’s network of tracks serves a variety of end-users and customers, all with hotbeds of manufacturing and economic activity. This fact has continued to drive revenues and demand for its rail-lines. For investors, that’s meant a steady diet of rising dividends with a streak stretching over two decades straight.
Our pick has continued to find growth as well.
Our pick has embraced technology and just-in-time railroading practices to reduce costs and boost operational efficiency. The firm has also begun to offer some of its software and applications to its customers for a fee, adding additional recurring sales to its bottom line expanding margins. Additionally, the firm continues to push into intermodal freight operations, allowing total system deliveries from train to truck. This has kept more customers within its system, boosting sales and cash flows.
All in all, our pick’s monopoly and key rail network has made it a cash flow all-star as well as a strong dividend payer. As such, our pick has also become a wonderful dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Friday, August 29, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 1.4 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest logistics pick could be a lucrative option.
