Overlooked Stock With Over 40 Years Of Dividend Growth

I had never heard of the following company.

There are thousands of stocks trading every day… and I can’t know them all!

But Brady Corporation (ticker: BRC) should be on everyone’s radar.

Brady services the niche identification and labels market.

Below is an infographic summarizing the types of products Brady sells.

Identification is very important for many types of businesses, including logistics, healthcare, manufacturing, and retail.

So many companies rely on Brady’s products, and the company is raking it in.

Over the past decade, Brady has grown its earnings by over 11% per year on average.

And its net margin of 12% is one of the highest in the business services industry.

Now, we’re dividend investors, and Brady has a good one.

Its dividend yield and growth won’t jump out at you.

Brady is currently yielding only 1.2%, and over the past 20 years, the company has averaged 3% dividend growth each year.

There are certainly many other companies with higher yields and higher growth rates.

But Brady has what many other companies don’t: simplicity.

Brady has a simple business model, which so many companies and organizations rely on to function.

And unlike many other industries, AI can’t come in and disrupt Brady’s business.

Plus, Brady has a long, consistent record of dividend growth.

Brady is raising its dividend again to $0.25 every quarter, which is 2% higher than its last payment.

You need to own stock in Brady by October 8 (Thursday) to get the higher payment.

Again, it isn’t a huge growth rate.

However, the increase marks the 41st straight year Brady has raised its dividend.

The company is also keeping a ton of its cash to reinvest in its business.

Over the past 12 months, Brady has only paid out 24% of its free cash flow to investors as dividends.

The low payout ratio means over 75% of the cash Brady generates each year is being invested back into the business.

And all of the extra cash means Brady is able to avoid taking on too much debt.

Brady only carries about $14 million in debt and has a tiny debt-to-equity ratio of 0.06x.

The business services sector averages about 6x as much debt as Brady.

Dividends are important.

We wouldn’t be here if we disagreed.

However, dividends aren’t the only thing we need to look at for dividend investing.

There aren’t many companies like Brady with such little debt and such a long history of stable dividend growth.

What stocks do you own with low yields and slower dividend growth?

Michael Jennings

This post originally appeared at Dividend Stocks Research.

Category: Dividend Stocks