New Buy R

06 Dec 2018 23:29

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It feels like forever since I last bought a stock but today ended that drought as I started a small position in Ryder System (R) at $52.55/share and a 4.11% annual dividend that will increase my annual dividend income by $43.

Ryder has 15 year dividend growth history and a 13 year inflation beat record and a 10 year dividend growth rate of 8.76% with its most recent 3.85% increase announced back in July. It currently has a forward PE of 8 and is lower than FedEx at 10 and UPS at 13.

Over the last 10 years Ryder has been aggressively investing in growth through acquisitions, technology investments, and process improvement. Their recent acquisition of MXD Group last spring folded a new "Last Mile" delivery service into their portfolio. What makes their last mile delivery service unique from other delivery services like the USPS, UPS or FedEx is that they are focused on bulky deliveries (furniture, appliances and electronics) and something referred to as over threshold services where they bring the product into a customer's home and have the ability to assemble or install the product. This is a great bolt on acquisition that continues on their vision to provide efficient outsourcing to businesses. Delivery and installation of bulky items is so fragmented with small delivery companies and is ripe for consolidation. If Ryder plays this right it may drive future growth through new customers like Home Depot and Lowes.

I have been watching Ryder for the last 3 months hoping to have the opportunity to buy near their 52 week low of $51 and today it was close enough. With potential interest rates and Ryder's considerable debt loads there may be opportunities to buy at a lower price and if that happens I'll increase my position but one of the reasons I limited the buy to small position.

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