We often hear the term “moat” thrown around when we look for top stocks and quality dividend payers. These huge competitive advantages over other firms can be used and exploited to provide years’ worth of steady dividend growth and profit potential. And our best pick in the consumer products sector has one of the largest and most impenetrable moats around.
Our pick is one of the largest distributors of nuts, bolts and other needed parts for the automotive and industrial sectors. The key and strength of its moat lies within its huge distribution network. Founded decades ago, our firm has built out an enviable network of stores and warehouse locations, all located close to end-users/customers. Because of this, our pick has continued to be the go-to name for various automotive and industrial parts. The beauty is, thanks to the size, specialty and “need to have it today” nature of many of the items it sells, our firm hasn’t faced the threats of the growing online retail world.
See the original article on our pick here.
The combination of this strong moat and rising industrial trends has helped power profits at our firm for decades. And it’s continued to share those profits via dividend increases for well over half a century.
But our pick isn’t done yet. The firm is quickly building out a similar moat overseas in Europe via a series of smart acquisitions. Likewise, growing automotive markets in India and China are ripe for replication of its business model. This provides a long runway for further dividend and profit growth.
All in all, our pick provides the best combination of safety, security and growth for your portfolio.
To summarize, here are five reasons why you should own this stock:
- Huge moat through its distribution network that sells more than 500,000 different parts across more than 9,000 different sales locations.
- Recorded nearly $20 billion in sales last year and is projected to see a 4% jump in revenue this year.
- In its 90-year history, sales have increased for more than 80 of those years, while profits have increased in more than 70 of them. That’s a track record that can’t be beaten.
- Its latest dividend raise of almost 6% adds strength to its 50+ years of dividend-growth history
- Healthy payout ratio of 53% and growing yield of 3.09%.
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