During the Gold Rush of the 1800s, it wasn’t the people doing the physical mining who got rich — the sellers who provided all the picks & shovels to the miners scored big. The namesake ‘picks & shovels’ business model still works today to produce stellar results for investors. Our latest Best Dividend Capture Stocks List pick is a prime example of this fact — producing a +1,700% return over the last twenty years.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
The company’s ‘picks & shovels’ happen to be in the fast-growing heating, ventilation, air-conditioning, and refrigeration (HVAC) market. This niche continues to expand as building operators, homeowners and enterprises look for ways to cut costs and reduce energy spending. As one of the largest distributors of systems and parts, our pick generates plenty of cash flows no matter what system or brand customers choose.
And thanks to new smart buildings, LEED certifications, and rising energy costs, the trend seems to be moving towards higher-margined systems.
Our pick has continued to grow as well. The HVAC distribution market is very fragmented, with lots of mom-and-pop players. Our pick has been a top acquirer of these smaller businesses to help add new regions and scale to its business. At the same time, our pick has been quick to introduce technology upgrades to its model. Quicker shipping, digital capabilities, mobile apps, and websites have helped boost sales. In essence, our pick has brought Amazon-like qualities to a very old-school business.
The result is that our pick has been able to become a top-notch distributor with a long history of shareholder rewards.
And due to that stability, investors have taken notice. Our pick’s top position within the HVAC sector 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 Tuesday, July 16, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 5.7 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our HVAC pick could be a lucrative option.
