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number cruncher

What are we looking for?

E-commerce shipping and logistics firms set to deliver sustainable dividends.

The screen

Ottawa-based Shopify Inc. recently announced its biggest-ever acquisition – one designed to bolster its new U.S. fulfilment centre business. Its purchase of Boston-area startup 6 River Systems Inc. will help solidify Shopify’s efforts to serve online sellers by storing, then shipping their merchandise to customers. It already provides 800,000 vendors with sales software.

While dividend investors continue to tap the online success of leading retailers, the logistics behind online shopping – the actual moving of packages from factory to warehouse to the customer – can also contribute.

Our search started with dividend-payers facilitating e-commerce through warehousing, shipping logistics and automation. (Note: Neither Shopify nor e-commerce juggernaut Amazon.com Inc. pay dividends.)

We then applied our TSI Dividend Sustainability Rating System. It awards points based on key factors:

  • One point for five years of continuous dividend payments – two points for more than five;
  • Two points if it has raised the payment in the past five years;
  • One point for management’s commitment to dividends;
  • One point for operating in non-cyclical industries;
  • One point for limited exposure to foreign currency rates and freedom from political interference;
  • Two points for a strong balance sheet, including manageable debt and adequate cash;
  • Two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments;
  • One point if the company is an industry leader.

Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.

More about TSI Network

TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor. The TSI Best ETFs for Canadian Investors is the latest. TSI Network is also affiliated with Successful Investor Wealth Management.

What we found

Our TSI Dividend Sustainability Rating System generated six stocks.

FedEx Corp. and United Parcel Service Inc. are world leaders in air and ground delivery. Expeditors International of Washington Inc. and C.H. Robinson Worldwide Inc. organize customs, warehousing, inventory management and shipping for clients. Canada’s WPT Industrial REIT leases its U.S. warehouse and distribution properties. Germany’s Kion Group AG has branched out from forklifts and warehouse equipment with the addition of high-tech warehouse automation.

We advise investors to do additional research on any investments we identify here.

Select shipping & logistics dividend stocks

Ranking*CompanyTickerDiv. Sustain. RatingPointsDiv. Yld. (%)Mkt. Cap. ($ Mil.)**Recent Price ($) **1Y Ttl. Rtn. (%)
1United Parcel Service Inc.UPS-NAbove Average93.1105,084.3121.042.4
2FedEx Corp.FDX-NAbove Average91.745,159.1150.91-37.5
3C.H. Robinson Worldwide Inc.CHRW-QAbove Average82.311,778.686.79-11.0
4Kion Group AGKIGRY-OTCAbove Average81.55,939.213.33-14.5
5Expeditors Int'l of WashingtonEXPD-QAbove Average81.312,964.475.291.8
6WPT Industrial REITWIR-U-TAbove Average75.6771.113.630.8

Source: Dividend Advisor

*Ranking is determined by TSI Dividend Sustainability Score. Where overall points are the same, analysts considered P/E, dividend yield and industry outlook to decide final placements. ** Share price and market cap are in native currency. 

Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.

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