Fast-Growing Dividend Stock Is The Perfect Fit For Your Portfolio
A popular brand is flying under the radar for dividend investors.
Everybody has heard of Levi’s jeans, owned by Levi Strauss & Co (ticker: LEVI).
But not enough people know about its dividend.
Levi’s dividend yield is only 2.6%.
There are certainly many with higher dividend yields.
But very few have better dividend growth.
Since it went public in 2019, Levi Strauss has already doubled its dividend in just 7 years.
One part jumps out instantly in the chart above.
Levi Strauss started trading on the NYSE at the worst possible time.
Just one year after going public, the COVID-19 pandemic hit and hurt many stocks.
Levi’s stock price crashed by more than 50% in just over a month.
And the company decided to suspend its dividend payments for the 3rd and 4th quarters.
It wasn’t great, but with so many companies stopping or lowering payments, it’s hard to blame Levi Strauss for doing the same.
Thankfully, everything went back to normal quickly, and Levi Strauss was able not only to reinstate its dividend, but also to resume dividend increases.
Despite the cut, Levi Strauss is averaging over 10% dividend growth each year since 2019.
And the industry leader is showing no signs of stopping.
Levi’s next payment is $0.16, which is 14% higher than its last payment.
Among apparel manufacturers, Levi Strauss has the highest one-year dividend growth rate!
But you need to own the stock by July 21 to get the higher payment.
Levi Strauss is so much more than just its dividend.
Levi’s profit margin of 9.7% is one of the highest among apparel manufacturers and is currently an all-time high for the company.
Its dividend payout ratio hovers around 40%, which is in line with Levi’s peers.
But Levi’s free cash flow margin is over 8% and more than 3x its industry average.
Dividend investors care a lot about free cash flow margin because it measures how well a company can convert its revenue into cash.
And the company needs cash to pay us our dividends.
Plus, we’re getting Levi Strauss at a great price.
Levi’s price-to-earnings ratio (P/E) is currently 15x, which is lower than its historical average.
The dividend yield is low, so if you need income right away, there are better options than Levi.
However, if you’re looking for growth, then Levi Strauss should definitely be on your list.
Even if the stock seems “young,” Levi Strauss is a strong, long-running brand, which is perfect for dividend investors.
What other dividend stocks are you looking at right now?
Michael Jennings
Dividend Stocks Research
Category: Dividend Stocks To Buy?
