“In business, I look for economic castles protected by unbreachable ’moats” – that adage comes courtesy of America’s favorite value investor, Warren Buffett. He’s talking about firms that have such huge competitive advantages over others it’s impossible for rivals to compete. For Buffett, this results in decades’ worth of steady and rising dividend growth. The best part is these huge moat advantages and payout increases can work for us regular Joes as well.
Case in point, our Best Dividend Stocks List pick in the consumer staples sector.
Our pick’s moat is arguably one of the largest in the sector. As a leading distributor of nuts, bolts and other products for the automotive and industrial sectors, our pick’s huge scale gives it a commanding presence. Due to its early mover advantage, our pick has built out an enviable network of warehouses and store locations that simply can’t be beat. The beauty is, thanks to the size, specialty and “need to have it today” nature of many of the items it sells, our firm hasn’t faced the threats of a growing online retail world.
This moat has translated into plenty of dividends for shareholders. Over sixty years’ worth of consecutive dividend growth, in fact. This puts our pick into a league of its own.
See the original article on our pick here.
The real win is that our pick isn’t done yet and continues to strengthen its moat even further. Thanks to smart M&A, our pick is using its scale to grow even bigger and take down smaller rivals that even think about nipping at its heels – this includes both here and overseas.
To summarize, here are five reasons why you should own this stock:
- Huge moat through its distribution network, which sells more than 500,000 different parts across roughly 9,000+ different sales locations.
- Continues to see record sales, with last quarter clocking in at nearly $5 billion.
- In its 90+ years of operating history, sales have increased in 86 of those years, while profits have increased in 75 of them. That’s a track record that can’t be beat.
- Increased dividends for well over 60 years straight.
- Healthy payout ratio of 53% and growing yield of 3.08%.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.
