>>> Costco Wholesale (COST) -- a membership-only discount retailer with a market capitalization of nearly $250 billion, pays a quarterly dividend of $1.02 per share. The annual yield of 0.73% isn't impressive on the surface, but the company has raised its dividend annually since 2004.
It also pays a special cash dividend roughly every three years. Given that pattern, shareholders can reasonably anticipate another special dividend in the near future since the last one was paid in December 2020 at $10 per share.
With Costco's business model, monitoring membership growth is an essential measure of health and future growth with membership price increases. In its last 12 reported months, the company grew its number of cardholders from 116.6 million to 124.7 million, resulting in a roughly 7% increase.
Costco's annual membership fees generate approximately $4 billion in high-margin revenue. The company's historical pattern indicates it raises these fees about every five or so years, and the most recent change occurred in June 2017, so it stands to reason that an increase in fees is likely on the horizon, which would boost membership revenue even more.
If there is a downside to investing in Costco, it begins and ends with its valuation. Using the standard valuation metric for mature companies of price-to-earnings (P/E) ratio, the stock trades at a P/E of 41.4, significantly higher than competitors Target and Walmart at a P/E of 16.8 and 31.6, respectively. Costco's five-year average P/E is 37.4, meaning the stock is currently trading at an even higher valuation than usual.
Despite maintaining a consistently high valuation, Costco's stock has demonstrated its status as a long-term winner, delivering a total return of 146% over the last five years. When combined with an impressive balance sheet with $7.2 billion more in cash than debt, Costco emerges as an essential holding for long-term dividend-focused investors.
>>> Winmark -- While many consumers might be unaware of small-cap stock Winmark (WINA), they are probably aware of its franchise-based retail companies that specialize in buying and selling secondhand goods: Music Go Round, Once Upon a Child, Plato's Closet, Play It Again Sports, and Style Encore.
Winmark's stock has demonstrated remarkable performance, surging 53% year to date, and even more impressively, delivering a total return of 145% over the past five years.
Like Costco, Winmark has a relatively low annual dividend yield and frequently pays a special dividend. Its yield is 0.9%, and it has paid a special dividend each of the last three years at an average of $4.97 per share. With the announcement of its special cash dividend typically in October, it is possible another one could be soon.
As a franchise business, Winmark is incentivized to expand its network because its revenue is primarily derived from franchise fees and royalties. Prospective franchisees must make an initial franchise payment of approximately $25,000 in the United States and contribute 4% to 5% of their weekly gross sales. CEO Brett Heffes believes there are 2,800 open territories for franchises, with only 1,303 locations as of July 1, 2023.
If there is a negative for Winmark, the recent stock run-up has made its valuation expensive, with a current P/E of 32.7. For comparison, Winmark averaged a P/E of 23.2 over the past five years. Nonetheless, with record revenue of $83.2 million and near-record net income of $39.9 million over the trailing 12 months, the market might finally be taking notice of the resale company valued at a market capitalization of $1.3 billion.
>>> CBIZ ACQUIRES AMERICAN PENSION ADVISORS
July 5, 2023
CLEVELAND, July 5, 2023 /PRNewswire/ -- CBIZ, Inc. (NYSE: CBZ) ("the Company"), a leading provider of financial, insurance and advisory services, announced today that it has acquired American Pension Advisors, Ltd. ("APA") of Indianapolis, IN, effective July 1, 2023.
Founded in 1997, APA provides full-service retirement plan consulting and administration assisting more than 1,200 clients in the design, implementation, and administration of all types of retirement plans including 401(k), 403(b), 457(b), defined benefit and cash balance. APA has 14 employees and approximately $2.9 million in revenue.
Jerry Grisko, President and CEO of CBIZ, said, "The acquisition of American Pension Advisors brings valuable talent, expertise, and capacity to bolster our growing Retirement Investment Services business. At the same time, this acquisition also strengthens our presence and visibility in the Indianapolis metro market and complements another acquisition in the same market we completed earlier this year. Working together, we will be able to offer our collective clients a broader array of services. I am pleased to welcome the APA team to CBIZ."
David Behrmann, of APA, stated, "We are so excited to join forces with a nationally recognized company like CBIZ. We look forward to offering the additional services and expertise of CBIZ to help our clients grow and succeed. I'm pleased that our team members will now have access to additional technical support, resources and tools that will make them more successful and better serve our clients."
CBIZ, Inc. is a leading provider of financial, insurance, and advisory services to businesses throughout the United States. Financial services include accounting, tax, government health care consulting, transaction advisory, risk advisory, and valuation services. Insurance services include employee benefits consulting, retirement plan consulting, property and casualty insurance, payroll, and human capital consulting. With more than 120 Company offices in 33 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.
>>> Why trash hauler Republic Services thinks the U.S. is going green despite the politics: ‘To be environmentally sustainable, it’s got to be economically sustainable’
by Phil Wahba
September 8, 2023
Jon Vander Ark doesn't mind anyone calling the company he leads, Republic Services, a garbage company. After all, founded in 1996, the company made its name hauling trash and still makes 5 million collections a day. But Vander Ark, CEO since 2021 and a 13-year veteran of Republic Services, has been working to modernize its business model to go after the higher-growth, higher-profit recycling market.
"I've seen us go from a garbage company to a waste company to a waste and recycling company to now an environmental services and sustainability company," says Vander Ark.
Last year, Republic managed 8 million tons of recyclable items, and extracted 2.4 million tons of materials that can have a second life. This strategy has boosted its stock in the last two years and given the company a market cap of $45 billion. What's more, under Vander Ark, Republic has gone after the fast-growing environmental services and consulting business, making a number of acquisitions. Vander Ark's moves raised revenue 20% last year to almost $14 billion.
The CEO says the way for Republic to thrive in this hyper-politicized environment around climate change is to simply be pragmatic about the focus on cost savings and revenue potential as Americans recycle more. For instance, Republic now has a fast-growing business recovering plastic consumer packaging for circularity, a term that refers to components being constantly re-used. It takes thrown away plastics and recycles them to produce high-quality plastic used by consumer packaged goods companies. "We think about circularity and de-carbonization as two fundamental mega-trends," says Vander Ark.
This interview was edited and condensed for clarity.
Fortune: How do we in the U.S. become a less wasteful society? And if we manage to do that, is that bad for business?
It would not hurt business. In fact it helps. We're already seeing that in terms of shrinking solid waste on a per capita basis. Typically a market grows with population, but solid waste is shrinking because we're diverting more and recycling is growing faster to make up the difference. Our aspiration is to accelerate that trend. So we look at every ton that goes into a landfill and challenge ourselves and ask, "How could we take that out and create value with it?" I pay for something to go to a landfill. But if I can recycle it, I get value for it on the other end.
When you look at how far along many European countries are in recycling in contrast to how much Americans throw out as trash, it's tempting to see Americans as lazy. Can recycling really become part of our culture?
We're certainly behind the Europeans. They're a very source-separated environment and things are very clearly separated for plastic, aluminum, glass and paper. That's how the U.S. was originally and recycling rates didn't really move for a period of time. When it did take off is when we moved to single stream, which is to put everything in one big container, which made it easier for people to recycle. But that has complications. You have some people who don't care and they're still putting garbage in and contaminating that load. And then you have at the other end, the wishful recycler who wants that greasy pizza box to be recycled so badly, but it can't be.
It seems like a lot of packaging is wasteful and impedes recycling. What can be done?
Take plastic packaging. Not all plastics are recyclable. So take a clamshell that is used for your take-out chicken rotisserie. It was made with post-consumer recycled content (material made from the items that consumers recycle every day such as aluminum, cardboard boxes, paper, and plastic bottles). But that shell itself is not going to be recycled, it's going to the landfill. So part of the opportunity is to design for recyclability upfront.
What do you make of the current pushback against ESG (environmental, social, and governance) standards for publicly traded companies? Could this hurt your business, or does this ESG emphasis march forward?
"ESG" needs to be unpacked. It's like a pig, a chicken and duck that get lumped together. All different, but all worthy topics. The "E" part of this is here to stay. We think about circularity and de-carbonization as two fundamental mega-trends that whatever the political sentiment, companies are investing billions of dollars in. There's a global consensus there and we see those as tailwinds for our business.
Another CEO recently told me that you can get consumers on board with green initiatives more easily if one doesn't mention climate change, and by emphasizing reducing waste and saving money. Do you agree?
We're not running away from climate change. We get that the world is heating up and humans are a factor in that and we don't hide from that. I would say this: if something's going to be environmentally sustainable, it's got to be economically sustainable. So we don't do things as science projects or for charity. It's our business and we're going to make money and grow.
You have a goal that by 2030, half of your new garbage and recycling trucks will be electric vehicles. That's ambitious but what stops you from going even faster?
Just like a passenger car, if you retrofit a diesel truck, you add too much weight with the batteries and so it becomes economically inefficient. But when you design it from scratch, you take enough weight out so it can run a full 10.5-hour day and 125 miles without having to stop, so you don't lose productivity.
Do you ever get offended by someone calling Republic Services a garbage company despite all the push you've made into recycling and environmental services?
We're not offended by that because people get too easily offended. That's what we called ourselves a decade ago and I've seen us go from a garbage company to a waste company to a waste and recycling company to now an environmental services and sustainability company. And as that's evolved, so has our mindset. We still have landfills and they are going to be with us for a long time, so we don't run from that. But we're way bigger and way more than that now.
>>> IDEXX Announces Novel Diagnostic Test for Kidney Injury, Expanding the Veterinary Industry's Most Comprehensive Renal Testing Portfolio
June 15, 2023
The IDEXX Cystatin B Test can help veterinarians detect kidney injury before changes in kidney function, promoting better patient outcomes
WESTBROOK, Maine, June 15, 2023 /PRNewswire/ -- IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in pet healthcare innovation, today announced the launch of the first veterinary diagnostic test for detecting kidney injury in cats and dogs. According to a recent IDEXX survey, as many as one-third of kidney cases seen by veterinarians are related to kidney injury, and a diagnosis can be challenging due to subtle or nonspecific signs.1 The IDEXX Cystatin B Test will be included in test panels assessing renal health, uncovering new clinical insights for an estimated two million patient visits annually. These tests will be run at IDEXX Reference Laboratories starting later this year in the U.S. and Canada, with plans to introduce the test in Europe in 2024.
The kidneys are vital to the overall health of a patient, regulating blood pressure, electrolyte balance, and red blood cell production, and removing toxins. IDEXX SDMA testing provides veterinarians with unmatched insights into kidney function, and the IDEXX Cystatin B Test will enhance their view into kidney health by detecting injury and providing additional clarity when a change in kidney function may not be apparent. Together, the IDEXX Cystatin B and IDEXX SDMA® tests offer a comprehensive view of the kidneys by uncovering structural injury and impaired kidney function.
"With the addition of the IDEXX Cystatin B Test, we are pleased to offer the industry's first biomarker for kidney injury," said Jay Mazelsky, IDEXX President and Chief Executive Officer. "The IDEXX portfolio of tests and technologies enables veterinarians to intervene earlier, advance treatment, and now detect kidney injury, resulting in better outcomes throughout the lives of their patients."
The IDEXX expanded renal testing portfolio now includes:
IDEXX Cystatin B Test, detecting kidney injury with or without changes in kidney function, providing valuable insights in cases such as early toxin exposure.
IDEXX SDMA® Test and creatinine, helping to establish a baseline for kidney function for monitoring and early kidney disease detection.
IDEXX FGF-23 Test, allowing for more confident recommendations of targeted therapy for cats diagnosed with chronic kidney disease (CKD) by monitoring phosphorous overload.
Urine testing, providing a deeper understanding of total kidney health by examining the physical and chemical properties of urine.
For more information on the IDEXX Cystatin B Test and IDEXX kidney health solutions, please visit IDEXX Cystatin B.
A joint statement from three founding members of the American College of Veterinary Nephrology and Urology accentuates the value this novel biomarker holds in the industry and aligns with a recent statement from the International Renal Interest Society (IRIS):
"The advent of diagnostic biomarkers capable to detect the presence of acute kidney injury as well as active and ongoing kidney injury in advance of or in the absence of changes in conventional markers of kidney function forecast an important advance in the evaluation of acute and chronic kidney disease in dogs. The development and validation of Cystatin-B as an active kidney injury biomarker in dogs that will be readily available to veterinarians has the potential to reshape the future diagnostic and therapeutic directions of kidney disease. As nephrologists, we anxiously await this new era of early disease discovery and management."
Dr, Gilad Segev, DVM, Dip. ECVIM-CA (Internal Medicine)
American College of Veterinary Nephrology and Urology, Founding Member
Associate Professor of Veterinary Medicine
Head, Small Animal Internal Medicine
Koret School of Veterinary Medicine
The Hebrew University of Jerusalem
Dr. Shelly Vaden, DVM, PhD, DACVIM (SAIM)
American College of Veterinary Nephrology and Urology, Founding Member
Professor Internal Medicine (Nephrology and Urology)
Medical Director, Extracorporeal Therapies
Chief of Staff, Small Animal
North Carolina State University, College of Veterinary Medicine
Larry D. Cowgill, DVM, PhD, Dipl. ACVIM (SAIM)
American College of Veterinary Nephrology and Urology, Founding Member
Professor, Department of Medicine & Epidemiology
2108 Tupper Hall
School of Veterinary Medicine
University of California-Davis
IDEXX is a global leader in pet healthcare innovation. Our diagnostic and software products and services create clarity in the complex, constantly evolving world of veterinary medicine. We support longer, fuller lives for pets by delivering insights and solutions that help the veterinary community around the world make confident decisions—to advance medical care, improve efficiency, and build thriving practices. Our innovations also help ensure the safety of milk and water across the world and maintain the health and well-being of people and livestock. IDEXX Laboratories, Inc. is a member of the S&P 500® Index. Headquartered in Maine, IDEXX employs nearly 11,000 people and offers solutions and products to customers in more than 175 countries. For more information about IDEXX, visit: idexx.com. For media inquiries, please get in touch at email@example.com.
Old Dominion - >>> 3 Top Trucking Stocks Under Heavy Accumulation
by Lucas Downey
February 6, 2023
Here are three companies under heavy accumulation.
Old Dominion Freight Line Inc. (ODFL) Analysis
First is the less-than-truckload hauler Old Dominion Freight Line (ODFL). The trucking stock is up 30% in 2023.
Healthy institutional accumulation has likely helped lift the shares higher, which you can see via the MAPsignals chart below. Since November there’ve been 6 unusually large volume inflows (green bars):
With a 12-month forward P/E of 30.8, shares could be attractive after a pullback. According to FactSet, the company is estimated to earn $13.30 per share in fiscal year 2024.
One thing is for sure, the shares have been in demand lately.
Knight-Swift Transportation Holdings Inc. (KNX) Analysis
Next up is Knight-Swift Transportation (KNX) which is another trucking company that operates in 3 segments: trucking, logistics, and intermodal. At MAPsignals, we believe in following large institutional flows. With the stock gaining 18% in 2023, we believe healthy accumulation is part of the story.
Since late November there’ve been 8 days where the stock jumped in price alongside outsized volumes. That can mean there’s institutional interest:
The 12-month forward P/E is pegged at 15.2X according to FactSet. Also, the company is expected to earn $4.64 per share in fiscal year 2024.
This unusual trading action suggests investors are expecting upside for the company in 2023.
Schneider National Inc. (SNDR) Analysis
The number 3 trucking firm racing higher this year is Schneider National (SNDR). This company provides transportation and logistics services. The market cap is just over $5.2 billion.
The stock has been an outperformer recently, jumping 26% in 2023. Notably, the shares have seen 4 large accumulation signals since November:
There’s no question the stock could be extended at these levels. However, this is one of the most in-demand trucking stocks according to MAPsignals research.
Strong sector leadership could mean there’s more upside for the group in 2023.
ODFL, KNX, & SNDR represent 3 of the top trucking stocks so far in 2023. Healthy institutional accumulation signals make these stocks worthy of extra attention.
ZTS, ODFL, TSCO, ASML - >>> 4 Top Stocks With High Dividend Growth to Buy in 2023 and Hold Forever
By Josh Kohn-Lindquist
Jan 28, 2023
Undeniable trends in semiconductor chips and veterinary care should buoy ASML and Zoetis.
Old Dominion's earnings per share have spiked eightfold over the last decade.
Tractor Supply's surprisingly strong rewards program highlights its customer loyalty.
While high-yield dividend stocks generate more excitement than the lower yielders, dividend growth stocks may be better for buy-and-hold-forever investors. That's because many high yields are unsustainable. And the remaining group that is well-funded can often only afford tiny payout raises -- just enough to keep their annual dividend increase streak intact.
With this in mind, let's focus on four fast-growing dividends that may offer more long-term passive income potential than their high-yield counterparts. Posting annual dividend growth rates between 25% and 46% since 2018, ASML (ASML -2.41%), Old Dominion Freight Line (ODFL 4.55%), Tractor Supply Company (TSCO -0.46%), and Zoetis (ZTS -1.82%) could make sense for investors looking to maximize their future passive income.
While ASML's lithography technology -- using light to make patterns on the silicon wafers used in semiconductor chips -- is undeniably complex, its investment thesis is far more straightforward. Do you believe the need for semiconductor chips will grow over the next few decades?
If you answered yes, ASML's dominant leadership position in its niche might make it a classic buy-and-hold-forever investment. Holding a monopoly with its bleeding-edge extreme ultraviolet (EUV) lithography system and a roughly 80% share of the more mature deep ultraviolet (DUV) market, ASML is of paramount importance to the semiconductor industry.
Thanks to this dominant positioning, the company has averaged a 26% free cash flow (FCF) margin across the last decade. With this incredible cash generation, ASML handsomely rewards its shareholders, as evidenced by its annual dividends skyrocketing 1,600% from its first payment in 2008.
In fact, using the last 12 months' figures, ASML could triple its 0.8% dividend and still have excess free cash flow. Going forward, ASML plans to make quarterly dividend payments, as opposed to their semi-annual payments in the last few years. This is great news for dividend reinvestment plans as they will now receive ASML shares at various price points throughout the year via its quarterly payouts.
As countries weigh becoming more technologically independent, the company's lithography systems should continue to see healthy demand. Trading at 27 times FCF, ASML brings incredible dividend growth potential at a reasonable price.
2. Old Dominion Freight Line
Boasting a total return north of 1,200% over the last decade, less-than-truckload (LTL) hauling specialist Old Dominion Freight Line has smashed the market.
Almost exactly as it sounds, LTL hauling consists of picking up partial loads from multiple locations and delivering them to one or many drop-offs. While far more complicated than traditional truckload hauling, this complexity acts like a moat for Old Dominion. With nearly 11,000 tractors, 43,000 trailers, 24,000 employees, 255 service centers, and linehaul dispatchers and software needed to coordinate everything, successful new entrants to the industry are rare.
Equally as important for investors, Old Dominion's operations are best in class. Consider its profit margin and return on invested capital (ROIC) -- a measure of a company's profitability from its debt and equity -- compared to its LTL peers.
Thanks to this outsized profitability, Old Dominion decided to initiate a dividend in 2017 and has raised it by 284% in the years since. Though the company's dividend yield of 0.4% may seem diminutive, it only amounts to 9% of its net income -- leaving an incredible runway for future increases.
To top everything off, Old Dominion's price-to-earnings (P/E) ratio of 27 is well below the 40 level it often saw in 2022. Posting 43% earnings per share (EPS) growth through the first three quarters of 2022, Old Dominion looks more enticing than ever.
3. Tractor Supply Company
With 27 million members in its Neighbor's Club rewards program, Tractor Supply and its 2,100 stores are a dividend growth success story in the footsteps of Home Depot and Lowe's. Since 2010, Tractor Supply has boosted its quarterly dividend payments from $0.035 per share to $0.92 today, an increase of over 2,200%. Buoyed partly by these dividends, the company has outpaced the market over the last five years.
So how exactly does Tractor Supply do it with behemoths like Home Depot and Lowe's in its backyard? In the simplest terms, it's by being the rural version of its giant peers. Consider that almost half of the company's sales come from its livestock and pet category. Through this niche offering, Tractor Supply draws millions of farmers, ranchers, and even suburban gardeners to its stores with its adjacent, yet quite distinct, product offering and hometown feel.
Once in the company's ecosystem, these customers often sign up for its rewards program and become loyal members. For example, since the pandemic's start, Tractor Supply saw 19 million new customers -- 55% of which became repeat purchasers.
The shares trade at just 23 times earnings, and the company's 1.8% dividend only uses 35% of its total net income. Raising its last dividend by 77%, Tractor Supply makes for a fascinating dividend-growth selection to hold forever.
In a recent survey by The Human Animal Bond Research Institute and Zoetis, 86% of pet owners and veterinarians said they would pay whatever was necessary for extensive vet care. While it is sad to consider any adverse outcomes concerning our beloved pets, the fact remains that Zoetis and its array of pet and livestock vaccines and medicines should only continue growing in importance.
In fact, since going public via a spinoff from Pfizer in 2013, Zoetis posted a total return of nearly 500%. Over the last five years, the company has almost tripled the returns of the S&P 500 Index despite falling by 19% in the previous year.
In the $45 billion animal health industry, Zoetis generates 61% of its sales from companion animals (cats and dogs) and 39% from livestock. Boasting a leadership position in pets, cattle, and swine (not to mention North America, Latin America, and Asia -- geographically speaking), the company maintains a portfolio of over 300 products.
Riding this success, Zoetis has grown sales and EPS by 9% and 13%, respectively, over the last three years. Over this same time, the company raised its dividend by 25% annually and now yields 0.9% with a small payout ratio of 26%. Thanks to the megatrends working in its favor and its steady growth, Zoetis trades at a rich 37 times earnings but makes for an outstanding dividend growth stock.