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The market has somewhat recovered from its recent correction.
However, many promising dividend actions remain well below their recent summits.
Three in particular resemble excellent purchase additions for my daughter’s portfolio.
Although I don’t expect my daughter to become a gathering fanatic like me, I liked to build a Portfolio with her This is full of simple companies (ISH) that any elementary child could appreciate. As a general rule, we try to prioritize the purchase of a new stock each year and have developed a portfolio which consists mainly of the following assets:
A mixture of products she loves, understandable companies and marks that she sees everywhereThese actions present me an easy way to highlight the number of companies we meet in our daily life.
Now, the market continuing at the forefront of the “correction” territory is a time as good as any to add to some of these actions (and to the longest position of my daughter) while they are down between 19% and 48%. Here is what makes these stocks of dividends of magnificent purchases for any portfolio for children.
Image source: Getty Images.
Although the railways are complex operators thanks to their labyrinthine nature, I would say that these are also excellent investments for children. First of all, they are easy to spot “in nature”, which makes it a ramp of the easy ramp to talk about actions or to invest.
In addition, their commercial models are simple to grasp. Someone in this city wants stuff from this city there, and they will move it there for the right price.
As for the reasons why we chose Union Pacific, this is the main rail operator around our wooden neck, and it is very common to see. However, just as important is that the return on the return of invested capital (ROIC) of the Pacific Union remains the best in class compared to its peers.
This metric tells me that Union Pacific is the best to generate capital returns that it deploys on new projects. Whether it builds coating extensions to accommodate longer trains, adds new main lines or improves terminals to allow new capacities such as manipulation of intermodal containers, the company produces extension benefits from these additional modules.
Better still for my daughter, Union Pacific has increased its dividend for 18 consecutive years, increasing its payments by 17% per year in the last decade. Currently, its return of 2.4% is much higher than its averages over 10 years, but only uses 48% of the company’s net income, so there is a lot of space for continuous increases. In addition to these dividends, Union Pacific bought its actions with a hand on the fist, which reduces its total number of sharing of portions by 31% since 2015.
Operating in a virtual duopoly with BNSF Railway in two Western thirds of the United States, Union Pacific benefits from a powerful geographic ditch which should continue to provide solid yields in my daughter’s portfolio for the coming years. With pricing turbulence helping the Pacific Union price to tumble 22% of its peaks, it is now like the perfect time to buy the regular stock.
Although the surplus and surplus insurer of specialty Kinsale Capital(NYSE: KNSL) is not one of the “basic” assets of my daughter listed above, it is one of her older ones. The company appeared on my radar a few years ago and I bought the best class insurer for my daughter. It has been a four bagger since.
Since I planned that it has the company for at least 15 years until it needed money in adulthood, I wanted a growth stock with a potential for growth in the dividend and that Kinsale corresponds to the invoice to perfection. Over the past five years, Kinsale’s revenues have more than quadrupled, while its dividend payments have increased each year, double in the same time.
While the CEO and founder Michael Kehoe has declared on many profits calls that this fellow growth rate will not persist forever (he is only capitalizing on a booming market), Kinsale remains a higher growth actions. Concentrated on the insurance of unusual niches such as ranges of firearms, homeless shelters and ax launch places, Kinsale thrives in areas where other insurers will not go.
The company retains its internal complaint subscription and management processes, which has created a steering wheel that makes Kinsale a more efficient insurer for each new quotation it offers. Powered by this process, the Kinsale combined ratio of 82% remains one of the best on the market – even in a quarter affected by the fireflows of Palisades.
With the company’s share of the company in 18%, thanks in part to these fires and a “normalization” of the advanced pricing environment that Kinsale has appreciated for years, this seems to be the ideal moment to “add” this winning investment.
Image source: Getty Images.
The investment thesis on it is quite simple: my daughter loves Pools, Pool Corp. is the best distributor of swimming pool equipment, and it is a magnificent stock of dividend growth. While Pool Corp. is directly linked to the notoriously cyclical American housing market, society has been a 78-bar since the beginning of the century.
Currently, however, this cyclicity works against society, as evidenced by its drop in sales in each of the last nine quarters. With new home constructions in the United States and a new swimming pool is closely starting with this metric, Pool Corp. is left pending sunny days.
Now down 48% compared to its heights of all time – but with my daughter likely to hold the business for 10 years more – Pool Corp. looks like an intriguing recovery investment at the moment. Although a turnaround may not be imminent, seeing things through a lens of several decades should give us an advantage, as we do not really do need An imminent turnaround.
In addition, the company is not likely to fail anytime soon. Generation of 62% of its sales from non-discretionary maintenance products and an additional 24% from semi-discretionary replacement and renovation items, Pool Corp. should resist these times of reduction in a profitable manner.
Even better for my daughter, the company will probably reward her for her patience. Currently paying a dividend yield of 1.6% which is close to all time, Pool Corp. increased its payments for 14 consecutive years while offering a growth rate of 17% in the last decade.
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Josh Kohn-Lindquist Positions in Adidas AG, Casey’s General Stores, Chipotle Mexican Grill, Coca-Cola, Hershey, Idexx Laboratories, Kinsale Capital Group, O’Reilly Automotive, Pool and Union Pacific. The Motley Fool occupies positions and recommends the Canadian Pacific Kansas City, the Chipotle Mexican Grill, Hershey, Kinsale Capital Group and Union Pacific. The Motley Fool recommends the Canadian National Railway, Casey General Stores and Idexx Laboratories and recommends the following options: Court June 2025 55 $ calls the Mexican Grill Chipotle. The Word’s madman has a Disclosure policy.
