Having a monopoly or wide moat is an easy way to ensure plenty of profits, particularly, if what you produce is needed by a wide range of industries. Our latest Best Material Dividend Stocks List pick is one such example! Using its status in a fragmented industry, our pick has continued to deliver plenty of profits, all while rewarding shareholders. This includes its latest 9% increase to its payout!
In the search for the Best Material Dividend Stocks, 16 factors are scored across Materials sector dividend stocks and only the best combination of attractive yield, dividend safety, returns potential and low returns risk receive a Buy rating. Our process is systematic, goal focused and designed for moderate risk investors with a long-term horizon seeking allocation to Materials.
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Our pick is one of only a few producers of industrial gasses in the world. These products are used by a wide variety of low- and high-tech end users. And thanks to the highly specialized infrastructure needed to create these products, there are only a handful of firms out there in the sector. And our pick happens to be one of the biggest, sending plenty of sales and profits its way.
And while this may sound like a boring industry, our pick has found plenty of exciting growth as well. Thanks to net-zero commitments and a focus on low carbon initiatives, hydrogen is quickly emerging as a winning fuel source. With hydrogen and new specialized gasses driving the boat, our pick has only managed to see margins expand and profits grow further. Additionally, excess cash is being put to good use as well. The firm continues to be an acquirer of smaller and specialized firms, boosting its reach. Meanwhile, buybacks and over 30 years’ worth of dividend increases have made its shareholders happy.
With its monopoly in a vital industry, hefty cash flow and shareholder friendly management team, our pick makes for an ideal dividend stock in the materials sector.
This well-covered large-cap Chemicals stock is yielding an unattractive 1.44% with a $5.100/shr forward dividend that is paid quarterly. Their $176.2B market cap ranks 1st out of 55 dividend stocks in the Chemicals industry (ex MLPs), and they have $18.8B in debt and $5.4B in cash.
The stock has support from both the sell-side and buy-side. Analysts are Overweight-rated on average with expectations for eps to grow a healthy 10% next year. Relative to the 52-week highs, the stock is outperforming the S&P 500 at -3% vs -14% and is one of the better performing Chemicals dividend stocks, which are -16% as a group.
Year-to-date, the stock has returned 9% vs 6% for the S&P 500 and 5% for the Chemicals industry (ex MLPs).
