Quick. Guess the world’s most precious resource. It isn’t crude oil. Nor is it gold. It happens to be water. Having access to clean and potable water is increasingly becoming a major problem across the globe. Shipping it, cleaning it, and storing it has quickly become a big business. For those firms—like our latest Best Dividend Capture Pick—it can mean a steady stream of profits, cash flows, and dividend growth!
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick is one of the largest firms operating in the water sector. Its product catalog is vast, covering everything from filters and pumps to valves and tanks. This covers both residential and industrial applications. This wide focus and catalog size allow it to generate strong sales and cash flows from its operations. Last year alone, the firm managed to sell over $4 billion worth of various water products across the U.S. and the rest of the world.
Those strong sales and cash flows have translated into 48 years’ worth of dividend growth.
Our pick has continued to grow as well, including new forays into applications for agriculture and turf grass as well as the energy industry. Processes like fracking and growing food require a lot of water, both in direct use and recycling after. These areas have added growth to the firm’s bottom line at higher margins. Additionally, our pick hasn’t been shy at both using M&A and divestiture to grow and increase its focus on the water. Thanks to smart bolt-ons and sale of non-core businesses, our pick has continued to grow across both the residential and commercial channels.
The combination of demand growth and strong sales has made our pick a free cash flow machine. And in that, it’s rewarded shareholders and has become 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 Thursday, April 18, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 1.70 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest water stock could be a lucrative option.
