1 Stock That Belongs in Every Dividend Investor's Portfolio
Sometimes, investors ignore successful stocks for a lack of a promising growth profile. Maybe cash flows look too stable, or, with a market capitalization in the tens of billions, a company seems too large for investors to conceive of further growth. Perhaps an organization with great potential operates in a low-margin industry and, heaven forbid, pays a dividend, signaling that it may not really be in growth mode at all.
Stock market pricing can be deceptive in this way. Companies with deep competitive advantages and extreme scale are often steadily and quietly rewarded for their dominance. Take retailer Costco (NASDAQ: COST), for example, which has all the listed strikes against it. It's a massive, dividend-paying stalwart in a sector -- wholesale club shopping -- that generates low-single-digit profit margins. In fact, for the past several years, Costco has averaged a paltry operating margin of roughly 3%, and a net profit margin of just 2%.
Yet Costco, with its current market capitalization of $153 billion, has a stock that's outpaced a slew of fellow "megacap" stocks in recent years, many of them hailing from higher-growth industries:
Source Fool.com
