Dividend.com has added an industrial technology firm to the Best Dividend Stocks List and removed a global semiconductor firm from the list.
When it comes to industrial firms, most investors flock to the biggest and largest stocks in the sector. After all, their multinational presences, big moats and hefty cash flows are hard to beat. But investors only focusing on the biggest of the big are missing out on a whole host of wonderful small-cap manufacturers that are just booming.
Take our new industrial pick for example. It’s proof that big things can come in small packages.
Our pick produces a wide variety of equipment that other firms use for inventory tracking, safety and product identification. This includes everything from barcode scanners and label makers to lockout tags and even inventory software. It’s a profitable niche that has helped our pick power its cash flows and dividends for over 100 years.
But our pick is anything but boring, and it has a multitude of ways to succeed in the days ahead.
The firm stands to benefit from a growing U.S. economy and overall businesses demand. Meanwhile, its labeling and scanning equipment is a must-have for surging e-commerce growth. And this is all set against the backdrop of the Republican tax plan. Our pick’s U.S. focus will mean that it gets the most benefit from the lower corporate tax rate. And let’s not forget that the potential threat of a trade war is a boon for smaller, domestically focused companies.
With these reasons in tow, as well as already strong profit and dividend growth, our new pick has plenty of potential for investors.
To summarize, here are five reasons why you should own this stock:
- Long operating history and strong economic moat in the sectors it serves.
- The firm’s products are tied to some of the biggest future trends, including e-commerce, food safety and healthcare.
- Great balance with a strong positive net-cash position.
- This year represents the 32nd consecutive year of dividend increases.
- Healthy payout ratio of 41% and yield of 2.21%.
Soft Removal of a Semiconductor Firm From the Best Dividend Stocks List
Unfortunately, as we add a new stock to our list, an old favorite must be removed. In this case, it’s one of our best performers in the semiconductor sector. The recent stock sell-off has hit multinational giants hard and that includes our semiconductor favorite. As a result, the firm’s relative strength score has suffered enough that it’s pulled shares to below our DARS threshold. Consequently, its overall DARS score has slipped and we are forced to soft remove the firm from our coveted list. However, the firm still offers plenty of potential for income seekers and numerous positives. As a result, we still remain bullish on the name.
The DARS model has been updated recently. Find out more about these changes here.
