{"id":5525,"date":"2023-11-01T12:52:54","date_gmt":"2023-11-01T12:52:54","guid":{"rendered":"https:\/\/connectwithfund.com\/markets\/this-megatrend-will-dominate-in-2024-and-these-2-dividends-will-soar\/"},"modified":"2023-11-01T12:52:55","modified_gmt":"2023-11-01T12:52:55","slug":"this-megatrend-will-dominate-in-2024-and-these-2-dividends-will-soar","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=5525","title":{"rendered":"This Megatrend Will Dominate In 2024 (And These 2 Dividends Will Soar)"},"content":{"rendered":"
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Look, this deglobalization trend is hitting high gear\u2014and if you miss your chance to tap it for surging dividend payouts, you will<\/em> regret it down the road.<\/p>\n

After all, it\u2019s megatrends like this one that we contrarian income-seekers live for. Let the \u201cbasic\u201d investors sweat headline-driven fears like rising rates and recessions. We\u2019ll happily lock in our \u201cmegatrend\u201d dividends and ride along for years, and even decades,<\/em> as our payouts soar triple-digits!<\/p>\n

Really, terms like \u201cdeglobalization,\u201d \u201conshoring\u201d and \u201cfriendshoring\u201d are just fancy ways of talking about the flow of manufacturing jobs back to the US, or to US neighbors like Canada and Mexico, from basket cases like Xi\u2019s China.<\/p>\n

Just in August, First Solar (FSLR)<\/strong> announced a new $1.1-billion facility in Louisiana, and Northrop Grumman (NOC)<\/strong> said it would open a plant in Maryland to make propulsion systems for hypersonic missiles. And in September, EV-battery maker Gotion said it would open a $2-billion plant in Illinois.<\/p>\n

And these are just some of the big announcements we\u2019ve seen, according to research firm IndustrySelect. There have been dozens of smaller plants and expansions rolled out in just the last few months, too.<\/p>\n

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With each of those factories \u201cbaking in\u201d decades of higher demand in their local economies, we\u2019re going to play it through a couple terrific \u201cpick and shovel\u201d plays. That\u2019s a strategy we love at my Hidden Yields<\/em> dividend-growth service. The term \u201cpick and shovel\u201d goes back to the California gold rush and refers to the fact that it was the folks who sold supplies to the miners, not the miners themselves, who really<\/em> struck it rich.<\/p>\n

So it goes with the two \u201cstealth\u201d deglobalization plays we\u2019ll talk about next:<\/p>\n

When a New Factory Opens, Cintas Gets the Call<\/h2>\n

Cintas (CTAS) <\/strong>churns out work uniforms, mats, cleaning supplies and first aid and safety products. Boring? Certainly. But this is essential stuff in plants across the land\u2014including all those new ones.<\/p>\n

That\u2019s driving the uniform maker\u2019s sales higher\u2014and translating into rapid dividend growth. Even though the stock yields just 1% today, it\u2019s hiked the payout an incredible 80% since early 2021.<\/p>\n

As you can see below, the share price (purple) kept pace with the soaring dividend (orange) until it broke away last year. That\u2019s good news for us because share prices tend to catch up to a stock\u2019s dividend growth over time\u2014a phenomenon I call the Dividend Magnet.<\/p>\n

We can expect Cintas\u2019s payout to keep powering higher: Its dividend only accounted for 37% of its last 12 months of free cash flow\u2014far below my 50% \u201csafety line\u201d\u2014and its sales are soaring, up 8% in the latest quarter. Earnings per share also popped some 9%.<\/p>\n

Debt is no problem for Cintas, either. It\u2019s sitting on about $2.5 billion of long-term borrowings, just 28% of assets and a mere 5% of its market cap<\/em>. Peanuts!<\/p>\n

Finally, Cintas is focused on the US and Canada, making it a pure play on onshoring and friendshoring\u2014and freeing it (and us) from worries that the strong dollar will drain its profits.<\/p>\n

Casey\u2019s: Another \u201cStealth\u201d Deglobalization Play<\/h2>\n

Casey\u2019s General Stores (CASY) <\/strong>might seem like an unlikely play on onshoring, as it sells food and fuel through its 2,500-strong convenience-store chain, the third-largest in the US. But stick with me for just a second here, and I think you\u2019ll see the connection.<\/p>\n

We like Casey\u2019s because, like Cintas, it operates right where most of these new plants are going, in states like Ohio, Michigan, Indiana, Kentucky and Tennessee.<\/p>\n

In other words, many of those new employees will be stopping for coffee and gas at a Casey\u2019s on the way to work, then putting on a Cintas uniform when they get there! The company also boasts some other dividend stats that are very<\/em> appealing indeed:<\/p>\n