One of the Best Dividend Stocks We Own
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- čas přidán 28. 07. 2024
- Parker-Hannifin stock is the type of "boring" stock that has quietly beat the market over the past two decades. It's also one of our largest dividend stock positions. Today we'll talk about PH stock, how they've managed to increase their dividend for 68 years in a row, and what exactly it is they do.
Investors today are hyper-focused on exciting growth stocks, which is all well and good, but it often means stocks like PH fly under the radar, despite being wonderful companies. Let's shed some light on this little-known dividend king.
RESEARCH PIECES USED IN THIS VIDEO:
1. A Review of Swell Investing for Millennials
www.nanalyze.com/2017/07/revi...
2. How to Build a Great Dividend Portfolio
• How to Build A Great D...
CHAPTERS:
00:00 Let's talk returns
00:55 Industrials stocks
02:41 Parker-Hannifin (PH)
05:22 A leader in motion and control systems
07:29 An announcement from Nanalyze
07:58 Parker's business segments
08:43 Acquisitions
09:56 Secular trends
10:52 How we discovered PH stock
11:22 PH stock dividend yield
12:17 Dividend growth
13:35 Parker's capital deployment
14:38 PH stock performance
16:17 Our position in PH stock
ABOUT US:
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DISCLAIMER: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, along with independently researching and verifying, any information contained within our CZcams videos or on our website, whether for the purpose of making an investment or otherwise.
#ph $PH
#parkerhannifin
#dividendgrowth
#dividendstocks
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Joe, you are my favorite analyst, because you are the most trustworthy. No hype. No click baits. No potential conflict of interest or biased opinions with sponsorship. I just want to say how much I appreciate the hard work and quality you and your team put into every video you make. You are making a huge difference in helping investors like me make wiser decisions. Thank you!
Thank you very much for the praise George. As they say in the corporate world, "I'm humbled and honored" and it's only because I'm standing on the shoulders of giants. I've always believed that if you can help people become better investors they will eventually reward you for that. These days, if you want to attract the best customers - shrewd individuals with high net worths - you need to show you can help them before they will consider paying you anything. That's why we're able to attract a higher tier of clientele and that's reflected in the quality of banter on our Discord server. Being able to help people is very rewarding, and I especially enjoy setting newbie investors on the right track and hearing from them down the road. We'll keep it up and I really appreciate your support! Joe P.
@@Nanalyzeyou’re the man Joe!
This is the only Chanel I trust with my money .
That's about the best compliment we could receive. Most firms pay lip service to words like "trust," "integrity," and "transparency," but they're critically important in the world of finance. We've always placed these front and center because that's the only way you'll get your best customers to open their wallets. Joe P.
This channel is a gem, i always like listening in.
Thank you for the kind words!
Parker Hannifin for those that want to skip the monologue
It's actually her more attractive cousin, Parker Hannifin. ;) The best part isn't even the +1,400% return, it's the other component of total return the video discusses which makes it one of the best dividend stocks we oen :)
What an excellent video and analysis of the business. I LOVE industrials and PH has been a true champion in my M1 portfolio. I am now going to consider adding it to my ROTH.
Oh that's great feedback to hear, thank you! Industrials is a nice broad category that contains some real gems that aren't so talked about.
Always love the dives on the dividend stocks! PH was already on my list. Glad to know it’s staying there. Thanks Joe !
You're most welcome! We'll keep mixing it up. Joe P.
Glad you fixed the glitch! I had initially signed up through CZcams but never received anything so I signed up directly through the website. I find the “premium article” access a little confusing still though. But I’m hardly complaining, I appreciate the content.
Oh glad to hear you're getting our free weekly newsletter! So if you sign up on our website (just an email) you get access to two free Premium articles per month. Otherwise it's just one. Or if you sign up for a month for free then you can read all the articles you want and cancel before it renews , or (even better) stay subscribed ;) Joe P.
I love your channel!
Keep up the good work
That is just great to hear, thank you! We will.
@@Nanalyze I just subscribed to your newsletter!! 👍👍
Thanks - high quality research as always. Thank you!
Picture at 7:44 - cult movie 😁
You're most welcome! It's almost sad to think that there are some people who spend their lives in corporate and will never watch Office Space. We need that to move from a cult classic to mandatory viewing for all new corporate employees. It's a must-see.
Thanks!
Thank you so much for the financial support! It really means a lot. Joe P.
Great video! I was wondering if you can look at it's one stock called &gpc genuine parts company
Thank you! GPC is also a dividend king with 68 years consistent increases. They're in the Consumer Discretionary sector with a fairly strong Q-score.
The older I get and the more I invest I recall growing up my friends from school who were the wealthiest generally had families who owned local and very specialized industrial companies and now I can see why when you look at the balance sheets of a company like Parker Hannifin. They’re cash flow generating machines with high margins and re-occurring revenue that are hard to compete with.
Indeed. It's fascinating to meet very wealthy people who achieved their wealth in boring unknown businesses that appear lackluster on the tin.
@@Nanalyze That’s a part of my theory in why these businesses can compound at such high rates over decades. The shareholders who buy into them know their competitive advantage and just don’t sell. They’re just using cash flows to give high ROE and high ROI in the background while everyone day trades Sofi
Fabulous vid. 👌 Does investing in multiple companies similar to PH (low yield, good dividend growth) provide equivalent results to investing in just one company?
I invest in several companies with roughly 1-1.5% yield, and div growth of at least 8%.
Since reinvested dividends are a key part of total return, would it be optimal to just select 1-2 companies versus 5+? 🤔
Great to hear! We have 30 DGI stocks in our dividend growth portfolio - PH is one of them. You probably ought to have at least ten to have a properly diversified portfolio. No matter how many you have, you can just turn on DRIPs for each and your broker (many of them should) will reinvest dividends automatically.
@@Nanalyze Gotcha. Last question, I know yall generally try to keep a stock less than 5% of your portfolio.
At what % do you usually think "Eh, this position is small. I'll roll it into something else." ?
@@businesswithredbeard5567 For DGI stocks, that never happens because they're all high quality companies. Well before they become that small they would have stopped increasing dividends and that's the only reason we ever sell a DGI stock.
What’s your view on their high level of debt ?
Yes they went from mid hundred (percent) debt/ equity to slightly under hundred ( ~ 98 %) any concerns ?
Good question. Debt can be used to a company's advantage provided it is responsibly managed. They appear to be doing that and actively talk about this in their investment decks.
Parker's hydraulic products are really tough industrial built, long lasting and easy to maintain. I like their their hydraulic valves and pumps when I was with my previous job. I thought Parker was a German company.
It's always the boring stuff that makes the most money over time
@@Nanalyze I love your analysis and the PH stock is sitting at my indicator trigger line. I am buying it tomorrow. Let's make home bucks. Thanks a lot.
@@Tideo123 Glad you enjoyed the analysis!
Sucks learning about this bad boy now. I feel like I’d be buying at the top. Drop a hint of a good entry point.
We've found with these dividend champions that if you want to hold them, just start buying using dollar cost averaging. You can use yield as an indicator of valuation (we do that as a simple measure) and wait for it to hit a target - like 1.5% or whatnot. The video shows how yield over time changes and that it's definitely quite low right now.
@@Nanalyze I’ll take a deeper dive. Cheers.
It is so hard to imagine trillion dollar companies compounding another 10x as that world seems to be one where candy bars are 10 bucks each or more. Yet I imagine that is how past people though when they were buying nickel cokes and dime hamburgers. You held this dividend stock for 20 years and it has compounded your money 1400%. Will it do that in another 20 years? And what does that world look in terms of what things cost? Hard to fathom.
The +1,400 return is simply the stock price. That's not including the dividends. So if you reinvested those dividends over 20 years the results would be quite remarkable - in addition to the price return :)
Luckily you picked the two decades of bull market. Try initiating that trade now. You'll get smoked. In 20 years you might be back to even. Probably not but you might.
Really great share but unfortunately stock is significantly overvalued at the moment.. On the watchlist for now.
Yes, it's been on quite the tear for whatever reason. They always revert back to the mean though.
@@Nanalyze Will start a position once it hovers fair value. 👍
audio scritching at high end
Hmmm... we're always looking to improve audio so this is noted. Not sure if we noticed this was off but will keep an ear open. We may be switching audio methods soon to incorporate video.
Let's get it real. If you have dividend yield 1.1% (like the stock you talk about: PH) and inflation is 3.5% you are losing money. Also worth to remember you are paying tax on your dividend, so assuming you pay 20% tax you get effective yield 0.88%. So the total is: you are -2.62%.
The video discusses how quickly dividend growth impacts low yield stocks.
Weird how your defending 3m so hard? Feels like you think our veterans shouldn't be compensated for tinnitus and hearing loss?
You should read the details of the case
Dividend is 1.15% what is so special about that?
The video covers your question ;)
20 yrs I will be dead then
That's one way to plan for retirement ;)
To expensive and very low dividend, definitely great business but again too expensive
Don't disagree with you on that one.
Thanks for the info. I know you don't give financial advise but... I am going to open a position with PH tomorrow. Also thinking about opening a position on MSCI. They are in a slight dip due to reasons I believe are temporary. Any thoughts on MSCI?
We need to do a piece on MSCI since I worked there for so long. They aren't on our radar but I feel like we need to given I know their business quite well. I'll add this to the queue though it may be some days (weeks) before it bubbles to the top. Will mention in our weekly meeting on topics. Joe P.
@@Nanalyze Awesome. That would be great. FYI they took a 15% dip because there retention rates went from 95% to 93% last earnings. But the CEO said it was due to a few black swan events. Such as many mergers of client companies, etc. He also made a forward looking statement saying he does not expect that decrease to continue. All other sectors of the business grew. Seems like an over-reaction to me :)
It's only 5.8%. For 20 years. Thats sh!t.
Maybe you should watch the video again ;)