Next DRIP Candidate: Raven Industries, Inc. (RAVN)
If you follow my blog, you know I have two DRIPs (Dividend Reinvestment Plans) which are active and which I invest money on a monthly basis. The dividends reinvest and the result is a nice position in specific stocks over time. The two plans I currently have active are Wal-Mart Stores, Inc. (WMT) and McDonald’s Corp (MCD). Now, it’s time to consider a third plan and it’s much different than these other two companies.
The company is Raven Industries, Inc. (RAVN). As you’ll see, it has all the makings of a great long-term dividend investment.
Some Background…. Raven is headquartered in Sioux Falls, South Dakota. The company started off as a scientific balloon company with clients like the Air Force and some Universities. Now, the company has four primary divisions as follows:
- Applied Technology – A booming division that supplies precision agricultural products to the ag industry
- Engineered Films – Industrial plastics
- Electronic Systems – Electronics manufacturing services and products
- Aerostar – the balloon division still performing very well
In the quarterly results just posted this week, the company knocked it out of the park with double digit revenue growth in each of the four divisions. Overall sales increased 19% to $101.5 million from $85 million in the quarter a year ago.
As you can see these aren’t huge numbers like Walmart and McDonalds. This is a smaller company. In fact, the market cap is just under a billion.
With that said, this company has a long history of incredible growth and value. The company has had a dividend for 39 consecutive years and has increased it annually for 25 straight years. Oh yeah, and whenever they have excess cash, they do special dividends like the one in September last year for $1.25 a share (over and above the regular quarterly dividend). One other thing… they have no debt either.
It’s an incredible well-run company, sort of off the radar of most investors. Exactly what we’re looking for.
Now, the stock has had a bit of a run (like most stocks) so it’s not in an ideal buying range. With the recent quarter announcement, the stock shot up a little bit more. It’s not at it’s 52-week highs, but it’s not far off either. Ideally, I’d rather be buying this stock closer to $45/share, but as I’m initiating a DRIP, I’m not too concerned about the price on my first few shares I buy.
Take a look at this company, and see if it might make sense in your portfolio. I think it’s a great company that relentlessly pays investors with a growing dividend.