The world’s global supply chain is a complex machine. Moving raw materials and finished goods from various ports, warehouses, and distribution centers requires a significant amount of manpower and expertise. The recent trade skirmishes and the COVID pandemic made this fact even more pressing. For firms that operate logistics networks and provide this expertise, such as our latest Best Dividend Capture Pick, it can mean substantial profits and cash flows for their investors.
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Our pick’s bailiwick is in shipping, offering options across the air, sea, land, and rail. The key is that the firm is what’s known as a third-party logistics (3PL) firm. That is, it operates a broker across its various channels for customers. It doesn’t own the trucks, but partners with independent owner operators to move goods. It doesn’t own vessels, but secures space on cargo ships for its customers. This asset-light model has enabled our pick to maintain high margins compared to many of its rivals. It’s also allowed our pick to remain nimble in the face of the ever-changing supply chain world.
The best part is that our pick has also experienced growth.
This has included expanding into less-than-a-truck-load shipping. Thanks to changes in consumer and business demands, many shipments are often done in small lots. LTL shipping has added a new source of high-margin revenue to its coffers. As it had expanded on its total return approach, it was getting goods and materials across a wide range of channels. Now, our pick has continued to expand its use of artificial intelligence for logistics needs, including route planning and efficiency metrics. This has had the added benefit of improving workflows and the quickness of delivery.
All in all, our picks’ massive scale and leadership position within the #PL space have made it a cash flow champion and strong dividend payer. Investors have taken notice, and our selection has become an excellent dividend capture play as well. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after the payout has been recovered. With an ex-dividend date of Friday, September 5 our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 7.2 days after going ex-dividend.
For investors seeking a combination of total return and capital appreciation, our latest logistics pick could be a lucrative option.
