1 magnificent dividend stock to buy at the moment as it rises to new maxima of all time

• Casey’s shared stores continue to hit the market, generating 16% annual total returns as it became public.

• Despite the growth he has achieved, his growth story can still be in his early heads.

• Casey’s dividend yield may be low, but 25 consecutive years of paying increase emphasizes its huge potential for dividend growth.

• 10 shares we like better than Casey’s common stores ›

In 2022 my daughter and I bought shares from a convenience store in Iowa (C-Store) and a pizza chain Casey’s Common Stores (Nasdaq: casy) To add to her hold on to hold.

Fortunately, Casey has been more than a double value ever since and is now my daughter’s largest holding.

However, instead of sticking to the traditional investment saying on “Buy Low, Sell High”, I plan to add some Casey shares to her portfolio soon.

You prefer to trust the maxim of “winners continue to win”, here are four reasons that I think Casey can continue to rise and continue to trade near the highest maximum.

Home in over 2,900 places in the Midwest, Casey is now the third largest C-magazine and the fifth largest pizza chain in the United States. Focusing mainly on small cities with a population of less than 20,000 people, Casey’s stores often act as a milestone for many of the easy -to -miss communities it serves.

Using this book, Casey has generated an incredible overall return over the years by rising:

• 32% in the last year

• 203% in the previous five years

• More than five times in the previous decade

• 5.220% since 2000

• 47 280% of its original public offering in 1983

To put this last bullet point in the context: Casey is 473-Bagger-which means that the $ 100 investment in the company’s shares in 1983 would cost $ 47,380 today.

Despite these incredible returns, the future can be just as bright for your favorite company.

Although Casey has almost doubled the number of his store since 2010, his potential for expansion remains huge. Approximately half of the company’s stores exist only in three states: Iowa, Illinois and Missouri.

Casey is currently operating in (and there are distribution centers that can serve) 20 states, which means that there is a long run -up track for the company, as it adds new places to these other 17 states.

In fact, management believes that approximately 75% of cities with a population of between 500 and 20,000 (within the scope of its distribution centers) still do not have Casey. Said another way, the company has long The way before he theoretically “upgrades” within the existing geographies he serves.

The best for investors, the management showed an appetite for expansion and beyond these 20 countries, using mergers and acquisitions (M&A) recently to go to the center of new markets such as Texas, Tennessee and Florida.

These M&A deals not only move Casey to new areas, but also tend to be immediately accurate to profit thanks to the recently formed M&A team of the company.

This M&A team is usually looking for smaller C-Magazini chains where they can integrate Casey’s Kassi Kahi’s kitchen. By adding new (or upgrading kitchen kitchen capabilities, Casey usually increases the internal sales of these newly acquired stores by 20% and their revenue before interest, taxes, depreciation and depreciation (EBITDA) by 70%.

Because Casey’s prepared sales and drinks have a high gross margin of 58%, the added kitchen capabilities help the company generate 15% return on the investment in the middle store, which acquires and integrates into its model.

Still, however, many of Casey’s more acquisitions were in bigger cities than those he had historically served. However, the company’s cash returns (ROIC) of the company continues to climb, showing that it seems to be successful in bigger cities.

If this figure continues to grow – and Casey continues to take into account the success of the bigger markets – the potential for expanding the number of stores can be massive.

Although Casey can only pay 0.5% dividend, its dividend potential should not be ignored. First, although it collects its dividend a year for 25 consecutive years, the company’s payments are currently using only 13% of their net income.

Management can theoretically disperse its dividend yields up to 3% and still have net income. However, this does not want to do this, given that he would soon use his excess profit from his expansion plans.

Even when Casey has grown the number of her store in the last 25 years, an investor who bought shares in 2000 and has been held to this day, will now receive a 20% dividend yield compared to their original cost basis. This shows the power of buying and retaining dividend manufacturers such as Casey.

As the management expects EBITDA to increase by 8% to 10% in the long run, while maintaining a repayment rate between 15% and 20%, double -digit dividend growth can be on the horizon for investors.

There is no way to suggest it, Casey trades with a worse score than usual.

However, I do not believe that this is just an overestimation of the market. Instead, I think the market has taken into account the history of the expansion of Casey’s stores and the fact that the company has increased its net income by 19% a year in the last decade.

Although this price-sfo ratio (money from operations) of 16 is higher than usual for Casey, it is not outrageous compared to the wider market. For example, if Casey gave up all his ambitions for growth and spends only money for capital maintenance costs, he will trade about 18 to 20 times free cash flow (FCF).

This is a huge discount for S&P 500The average price-FCF ratio, which is somewhere closer to 30. Obviously, we don’t want Casey to give up growth costs, but I wanted to give this comparison to show a relatively cheap estimate compared to the wider market.

As Casey continues to constantly march from the US and raise her dividend annually, everything in the estimation of the subdivision-I am fully pleased to add to the victorious position of my daughter, even with shares back near all time.

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Josh Kon-Lindquist has positions in Casey’s General Stores. Motley Fool recommends Casey’s common stores. Motley Fool has a policy of disclosure.

1 Magnificent dividend shares to buy at the moment as it rises to new maximums of all time, originally published by Motley Fool