Arguably, one of the hardest sectors to operate in has to be retail. The fickleness of consumers, ever-changing business models and a shifting economic environment make for a tough go. However, a handful of retailers have figured out how to operate in niches and create durable business models. Those who do continue to reward shareholders with plenty of dividend growth and capital appreciation. Our latest Best Dividend Capture Stocks List pick is a prime example, increasing its dividend for over 15 years straight!
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick’s niche is serving rural customers and those who live just outside of suburban areas. While we tend to think of urban areas as the hotbeds of consumerism, rural customers have unique needs. As the largest retailer tapping these customers, our pick has become the go-to name to fill their requirements. The best part is that – more often than not – they require ‘need-it-now’ items that can be too big to fill via e-commerce means. This creates frequent store visits and return customers. The end result is a steady stream of revenue and cash flows.
However, our pick isn’t just a slow-growth pony.
Growth at our pick continues to be swift. A revamped rewards program has not only increased sales but also created plenty of data for our pick to mine. Meanwhile, forays into the pet-care business – as well as online ordering/pick-up – have helped drive sales. A conservative and shareholder-friendly management team has also helped. With a low debt load, our pick has been able to make the most out of its rising sales and growth.
All of these factors have our pick a great dividend stock, and one that investors continue to prize. As such, it’s also a great 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, May 24, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 6.4 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest rural retailer play could be a lucrative option.
