Providing a required service to a heavily regulated industry can be a great way to find steady cash flows and profits. It’s even better if that industry is in its infancy and experiences tremendous growth. Our latest Best Dividend Capture Stocks List pick has found such a niche and has managed to grow along with its sector, providing its shareholders four straight years’ worth of dividend growth.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick happens to operate in the growing cannabis industry. With more state governments making marijuana legal for both recreational and medical use, our pick has quickly grown into a powerhouse in the sector. But our pick isn’t producing cannabis products — it happens to own the regulated real estate and greenhouses that other cannabis firms rent and use to grow their products. These highly specialized properties need to check off plenty of boxes and can be expensive for a cannabis firm to own/operate. It’s often cheaper to go with a specialist. For our pick, this niche allows it to profit from the sector while removing much of the risk of failure.
Our pick has found plenty of growth as well. The cannabis industry is small and fragmented, which allows our pick to grow via sale-leasebacks and M&A. This adds new properties and instant cash flows to its bottom line. Moreover, recent discussions to move into the non-medical marijuana sector have the potential to expand its property base further.
The result is our pick has found a way to be steady and profitable in an otherwise risky and start-up-based sector.
Investors have continued to take notice of our pick, its stability, and its potential as a dividend player in a risky industry. This has made it a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Monday, September 30, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 10.5 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our real estate pick could be a lucrative option.
