Retail was already becoming a bloodbath before the COVID-19 pandemic. The new reality of omnichannel and “click & collect” has upended the sector in a big way. It’s created a split of “have’s” and “have not’s” for the industry, with store closures and bankruptcies not being a surprise anymore. The ongoing COVID-19 pandemic is only accelerating this change.
Luckily, our new Best Dividend Stocks List pick in the retail sector is immune to the turmoils of the industry.
Our pick has long been dubbed “Amazon-proof,” with the key being in its operating niche. Owning and running a network of farm stores, our pick focuses on the more rural sections of the nation. Items like horse feed, barbed wire and equipment for farming aren’t very suitable for online sales. Moreover, these sorts of items are typically “need it now” things. Customers often can’t wait even two days to repair a section of fence or tractor. As a result, our pick has continued to see rising sales in the face of online competition.
Even with the coronavirus bearing down on the world, cattle needs to be fed and fields need to be tended to.
Perhaps the best part is that there is still plenty of growth to be had for our pick. In keeping with its rural-focus, our pick has moved into tangential operations, including the lucrative pet-care sector of retail operations. So far, these pivots have made a ton of sense for the firm, and it’s been able to score more sales.
All in all, its niche has continued to prove lucrative for shareholders with years of cash-flow growth and dividend increases behind it.
To summarize, here are five reasons why you should own this stock:
1. Focus on a specialized and “Amazon-proof” rural market niche allowing it to pull in more than $8 billion in annual revenues.
2. Continues to see sales growth during the COVID-19 pandemic, with new same-day delivery and pick-up options.
3. Increased its dividend for nearly 10 years straight, with the last increase being close to 13%!
4. New store concepts in the pet-care sector are fueling torrid growth.
5. Healthy payout ratio of 30% and growing yield of 1.54%.
Removal of a Packaging Name
Despite the growth of online sales, overall consumer activity and global trade remains lower, which has hurt our pick in the packaging sector. Revenues and earnings guidance remain low, and investors have started to abandon the stock due to this slow rate of growth. As a result, the pick’s overall DARS score has dipped and we’ve been forced to remove it from our coveted list.
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