When the California Gold Rush of the 1800s occurred, the people who got rich weren’t the miners themselves. It was the shopkeepers and store owners that kept the miners supplied with picks, pans and other equipment. In this instance, whether or not an individual miner struck gold was irrelevant. The shopkeepers made money no matter what.
Our Best Dividend Stocks List pick in the chemicals sector is the modern equivalent to the store owners during the gold rush.
Our pick is one of the largest producers of ingredients used by food and consumer goods manufacturers. Its flavors, scents and other additives form the basis for many of the products we consume in our daily lives. From the mint in your toothpaste to the watermelon scent in your gum, our pick’s ingredients continue to be found in a wide variety of products. This fact and its wide moat have allowed our pick to produce ample cash flows for years.
But our pick is still finding new ways to grow.
A focus on textures and new organic/natural additives are helping boost sales and margins further. Meanwhile, it just closed on one of its largest acquisitions ever. This buyout of a major rival’s operations will expand its reach further in a variety of ingredients. All in all, it’ll create a behemoth in the sector. One that nearly all consumer products and manufacturers will use.
For investors, this is the perfect definition of a wide moat. And that has been reflective in our pick’s long history of dividend increases and profits.
To summarize, here are five reasons why you should own this stock:
- One of the largest players in the additives industry, pulling in more than $5 billion in sales during fiscal 2020.
- A wide moat helps it provide products for many end-users across multiple industries.
- Smartly used M&A to grow its bottom line, making it a dominant player in its niche.
- Has been a great dividend stock throughout its history – increasing its payout nearly 200% over the last decade.
- Healthy payout ratio of 52% and growing yield of 2.15%.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary Dividend.com Rating system. Go Premium to find out the entire list.
