One of the best business models could be the toll road. After an initial investment, owners just sit back and collect a fee every time someone drives over a road or a bridge. Adapting that model to other sectors and industries has long been a great way for dividend seekers to profit – and one of the best places is the stock exchange. No matter how the market performs, the exchange operators collect plenty of listing fees from companies as well as other charges to brokers.
This fact has powered our latest Dividend Stocks List pick for decades, including its latest 4%+ dividend increase last month.
As an early adopter and leader in computerized trading, our pick is home to some of the largest technology stocks on the planet, which has made its exchanges the home for innovation in the United States. As trading volumes in the tech leaders exploded over recent years, our pick has continued to feast on listing revenues and fees.
Innovation has continued with our pick, which recently dived head-first into providing data and indexing solutions. Meanwhile, the rise of exchange-traded funds (ETFs), and other new products, have provided a second wave of listings for our pick – all of which have continued to translate into higher fees and growth for the company.
For investors, it means plenty of recession-proof dividends, cash flows and high-growth potential.
To summarize, here are five reasons why you should own this stock:
1. One of the largest stock/futures exchanges pulling in more than $2 billion in sales last year.
2. Recession-resistant revenues.
3. New forays into technology, data and other services provide extra growth opportunities.
4. Has grown free cash flows by a CAGR of 9% over the last five years and seen strong dividend growth in that same time period.
5. Healthy payout ratio of 35% and growing yield of 1.83%.
Removal of an Asset Manager Name
Unlike the exchanges, the asset managers have suffered in the wake of recent volatility – this includes our pick in the sector. Despite our pick’s forays into indexing/ETFs and wealth management, fee revenue has started to shift lower, which has sent many investors to the exit doors. With earnings expected to be less than ideal and selling in the stock occurring, our pick’s overall DARS score has suffered and we’ve been forced to remove it from our list.
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.
