We tend to focus on urbanization and the growth of cities when we come up with investment theses. However, there are a lot of people that live outside or just outside the boundaries of a major city. And it’s here that our newest Best Dividend Growth Stocks Model addition has made its living. And, boy oh boy, what a living it’s made, supporting investors with continued dividend growth for over a decade and a current 1.6% yield!
You can check out the Best Dividend Growth Stocks Model Portfolio to explore all the stocks.
Our pick is a retailer that focuses on the “outside the city” customers – the ones who live just beyond the edge of the suburbs. And it turns out this is a hugely profitable niche to be in. So much so that our pick has been able to leverage its brand and footprint to drive cost synergies and higher margins. Perhaps even better is that many of the items it sells are “need-it-now” items and are unable to be delivered quickly via online means, making them e-commerce proof. However, the firm has boosted its own click-and-collect operations.
Meanwhile, the firm continues to realize torrid growth. Thanks to the pandemic and the rise of farmettes (or ‘hobby farms’), our pick has benefited from a mass migration out of the cities and into more rural areas. At the same time, a focus on pet supplies and needs has added extra oomph to its bottom line as well.
All in all, our pick remains a top name in its niche – one that pays a hefty growing dividend.
In addition to our rural retailer, we increased our positions in two defense contractors, a regional bank, a snack food marker and an energy stock. In order to make room for our new position increases, we’ve been forced to remove a bank and reduce our position in a steel maker from the portfolio.
