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>>> Winmark: Powering the circular economy megatrend

https://finance.yahoo.com/news/2-dividend-stocks-double-now-143800565.html

Home to over 1,300 resale franchises across its Plato's Closet, Play It Again Sports, Once Upon A Child, Music Go Round, and Style Encore brands, Winmark is a shining example of the effect that circular economies can have on the world. Thanks to its operations, the company estimates that since 2010, it has put over 1.7 billion items back to good use, helping them avoid landfills, storage units, garages, or the top shelves of closets.

While this feel-good purpose alone makes Winmark an exciting stock, the company's long-term partnerships with its franchisees could prove to be the true magic.

Since it's thinking decades ahead (sometimes even multiple generations ahead), Winmark isn't overly concerned with what happens quarter to quarter. What it wants to do is build a lasting legacy alongside its franchisees. Speaking to Jim Gilles with The Motley Fool, Chief Executive Officer Brett Heffes expounded upon this notion:

Because what happens, is our most successful franchisees, they understand that their business is a legacy asset in the community. They manage the business for themselves, the community, but more importantly, the next generation. This legacy mindset leads to continued investment on our part, whether it's technology, whether it's marketing, whether it's operations, and it just allows us to fulfill our mission.

In operating over this generational time frame, Winmark takes a slow and steady approach to its growth, inching sales higher by 4% annually over the last decade. By taking its time to vet new franchisees and scout new potential store locations, the company has generated a ridiculous 188% ROIC and a free cash flow margin of 51%.

Armed with this cash generation, Winmark always looks to reward shareholders, as it typically pays out almost all excess cash to shareholders in the form of special dividends in many years. However, if Heffes deems the company's shares to be trading below intrinsic value, he'll also swoop in to repurchase shares, which led to a 4% annualized decline in share count since 2014.

With Statista projecting the circular economy to nearly double its sales between 2022 and 2026, Winmark is well-positioned to continue rewarding investors for decades -- if not generations -- to come.

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