The world’s supply chain continues to evolve in a dramatic way. First, COVID exposed the fragility of the world’s logistics network, and now the tariffs are rewriting trade. For businesses, getting the products they need when they need them is critical. For the foodservice industry, this is an even more paramount issue. Those firms, like our new Best Dividend Capture Pick, that get this distribution right can yield some substantial dividend increases and profits for their shareholders.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick happens to be one of the world’s largest broadline food distributors. With hundreds of distribution warehouses, trucks, and logistics assets, it sells, markets, and distributes food products to restaurants, healthcare and educational facilities, sports stadiums, and other venues that serve food worldwide. That size and scope allow it to deliver a wide range of perishable and non-perishable food items to a wide range of customers both quickly and efficiently. Better still is that many of its customers sign long-term contracts, allowing our pick to predict its cash flows. This has helped it deliver a multi-decade run of dividend increases.
However, our pick has still managed to find growth as well.
Part of that growth has stemmed from its long history of mergers and acquisitions. This has included acquiring mid-sized rivals as well as specialty food suppliers to expand its product catalog and add higher-margin goods to its bottom line. Additionally, the firm has embraced technology, not only for its operations but also through its customer relations. Finally, our pick has continued to expand into tangential products, such as restaurant equipment, as well as services like menu design. These other businesses outside its core food distribution assets have continued to boost margins and cash flows at the firm.
For investors, our pick’s long history of dividend payments, steady cash flows, and potential for growth has made our pick 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 Thursday, July 3, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 11.1 days after going ex-dividend.
For investors seeking a combination of total return of income and capital appreciation, our latest distributor pick could be a lucrative option.
