Dividend.com has added an industrial manufacturer to the Best Dividend Stocks List and removed a leading medical device firm from the list.
Lately, a lot has been written about the slowing global economy and how the manufacturing sector is starting to decline. However, not all manufacturing companies are the same and there are pockets of industrial activity that are thriving. Luckily, for our new Best Dividend Stocks List pick, it happens to operate in one of the biggest and most exciting areas of the industrial sector.
Our pick has long been one of the largest diversified industrial names on the planet. But these days, it’s focused on one specific area – and we’re talking about aerospace engineering.
After spinning out slower growing, yet still, profitable divisions, our new pick is nearly 100% about aerospace. This has turned out to be a smart move. Spending by governments and private industry on new planes and flight technology continues to grow by leaps and bounds. In fact, our pick was able to realize 10% organic growth in its aerospace segment in its latest quarterly results. With rising defense budgets and continued spending, our pick should be able to keep that pace of growth going into the future.
Meanwhile, its other remaining businesses are still firing on all cylinders as well. Themes such as smart-buildings, cybersecurity and Internet of Things (IoT) processes continue to strengthen our pick’s other divisions. Aerospace is running the show, but these businesses are still producing billions in sales for the firm.
All of this translates into some hefty dividend growth. Our pick was recently able to raise its payout by nearly 10%.
To summarize, here are five reasons why you should own this stock:
1. Globally diversified manufacturer covering a wide range of high- and low-tech products across various sectors.
2. Pulled in nearly $35 billion in revenues during 2018 and managed to see a 5% CAGR for its EPS over the last five years.
3. Has smartly used M&A and spin-offs since the recession to boost profitability and grow revenues.
4. Expected to realize well over $5 billion in free cash flows for all of 2019 and recently increased its dividend by nearly 10%.
5. Healthy payout ratio of 44% and yield of 1.99%.
