Dividend Growth Stock Overview: C. H. Robinson Worldwide, Inc.

Photo: Freeimages.com/Rafael Vila

About C. H. Robinson Worldwide

C. H. Robinson Worldwide is one of the largest global 3rd party logistics company in the world. The company assists its customers with freight shipments across the globe, including arranging for the cheapest method of shipment and support with customs requirements and laws. In 2014, C. H. Robinson provided support for 14.3 million shipments to over 46,000 customers. The company has its headquarters in Minnesota and employs more than 11,500 people.

The company also offers supply chain consulting and analysis services, and still retains its original business of sourcing fresh fruits, vegetables and other perishable items to grocery retailers, restaurants and wholesalers. This original business, called Robinson Fresh, was established when the company was formed in 1905. It represents only 6% or so of C. H. Robinson’s current revenues, but it was from this business that the company grew its current logistics services.

To support its logistics business, C. H. Robinson has 281 offices around the world, including more than 50 in Europe and nearly 40 in Asia. These offices support relationships with nearly 66,000 transport companies that are able to ship freight of nearly all sizes, from less-than-truckload (freight that fits onto a pallet; more than one pallet fits into a tractor-trailer), to standard size ocean-going cargo vessel containers. Nearly half of all the shipments handled by C. H. Robinson are between two of the company’s offices; most of those are truckload size shipments.

C. H. Robinson saw good revenue and earnings increases in 2014: the company earned $3.06 per share – up 15.5% from 2013 – on total net revenues of about $2 billion (up 9.3% over 2013). The gains continued in the first 9 months of 2015, with EPS up 15.4% over the first 9 months of 2014. Projecting the EPS growth forward in the 4th quarter gives the company a full year EPS of approximately $3.53. With a current dividend payment of $1.72 a year, C. H. Robinson has a projected payout ratio of slightly less than 50%.

C. H. Robinson has an active share repurchase program. In August 2013, the company authorized the repurchase of 15 million shares; 10.3 million shares remained available on the program at the end of 2014, which represents approximately 7.2% of the outstanding shares.

The company is a member of the S&P 500 index and trades under the ticker symbol CHRW.

As a member of the S&P 500, once C. H. Robinson has increased dividends for 25 consecutive years S&P will classify the company as an S&P Dividend Aristocrat. If C. H. Robinson is able to continue to grow its dividend each year and to remain a member of the S&P 500, it would be able to be classified as a Dividend Aristocrat at the beginning of 2023.

C. H. Robinson’s Dividend and Stock Split History

C. H. Robinson Dividend Growth

C. H. Robinson has compounded its dividend at an average rate of over 20% since coming public in late 1997.

C. H. Robinson has paid and increased dividends since coming public in October 1997. With one exception, the company has announced annual dividend increases at the beginning of December, with the stock going ex-dividend in mid-December. (The only exception was 2013, when C. H. Robinson skipped a dividend increase. Year-over-year dividends did end up increasing.) In December 2015, the company capped off its 18th straight year of dividend growth with a 13.2% dividend increase to an annualized rate of $1.72.

The company’s dividend growth has slowed since first coming public. From 1998 – 2008, the annual dividend growth was often over 20%. More recently, it has slowed to the high single digit or low double-digit percentages. Over the last 5 years, the compounded dividend growth rate has been 8.6%, while over the last decade it has been 16.0%. Since C. H. Robinson’s first full year of dividends in 1998, the dividend has compounded at an average annual rate of 20.6%.

C. H. Robinson Worldwide Inc. has split its stock twice. The splits, both 2-for-1, occurred in December 2000 and October 2005. A single share purchased prior to December 2000 would have split into 4 shares.

C. H. Robinson’s Direct Purchase and Dividend Reinvestment Plans

C. H. Robinson does not have a direct purchase or dividend reinvestment plan. In order to invest in C. H. Robinson stock, you’ll need to purchase it through a broker. Most brokers will allow you to reinvest dividends without any fee. Ask your broker for more information on how to set this up if you are interested.

Helpful Links

C. H. Robinson Worldwide’s Investor Relations Website

Current quote and financial summary for C. H. Robinson Worldwide (finviz.com)

 

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