{"id":46295,"date":"2023-08-09T09:07:07","date_gmt":"2023-08-09T13:07:07","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/unreal-indicator-delivers-huge-8-3-dividends-77-payout-growth\/"},"modified":"2023-08-09T09:07:10","modified_gmt":"2023-08-09T13:07:10","slug":"unreal-indicator-delivers-huge-8-3-dividends-77-payout-growth","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=46295","title":{"rendered":"Unreal Indicator Delivers Huge 8.3% Dividends, 77% Payout Growth"},"content":{"rendered":"
\n

Few folks know it, but there\u2019s a comically<\/em> ignored indicator that regularly hands out safe 8%+ dividends\u2014plus payouts that surge double-digits.<\/p>\n

I\u2019m talking about insider buying.<\/em><\/p>\n

When it comes to the buys and sells of the folks in corporate C-suites, Peter Lynch said it best: \u201cInsiders may sell their shares for any number of reasons, but they buy them for only one: the think the price will rise.\u201d<\/em><\/p>\n

Far be it for me to \u201cedit\u201d Lynch, but I\u2019d add one more thing: these ballers also think the dividend is safe.<\/em><\/p>\n

Think about it for a second: dividend safety is priority No. 1, 2 and 3 for income investors (I hear it from members of our Contrarian Income Report<\/em> high-yield service all the time!). Now imagine you\u2019re the CEO of a company and want to not only keep your<\/em> income safe but that of your colleagues and millions of shareholders, as well.<\/p>\n

That\u2019s a very<\/em> nice alignment between management\u2019s interests and ours. And a dynamite indicator of payout safety, too.<\/p>\n

With that in mind, let\u2019s zero in on two insider faves: an industrial firm whose dividend soared 77% in 5 years and a closed-end fund (CEF) trading at a (rare) discount\u2014and throwing off a rich 8.3% payout as I write.<\/p>\n

<\/fbs-ad><\/p>\n

Insider Buy No. 1: This CEO Has $5 Million<\/em> Piled Into This Surging Dividend<\/strong><\/h2>\n

Let\u2019s start with Graco
\n
\n GGG
\n <\/fbs-ticker> (GGG),<\/strong> whose president and CEO, Mark Sheahan, has more skin in the game than most honchos. SEC filings show that on July 31, he bought 1,263 shares for a total cost of $99,828. That brings his total hoard to 62,986 shares, with a value north of $5 million <\/em>at the current share price.<\/em><\/p>\n

That\u2019s a big endorsement from Sheahan, who only became the industrial firm\u2019s president and CEO in June. Before that, he was CFO
\n CFO
\n <\/fbs-ticker> and treasurer, so we can be sure he has a firm grasp on Graco\u2019s business.<\/p>\n

Graco catches our attention for other reasons, as well. For one, it\u2019s what I\u2019d call a large midcap stock, with a market cap around $13 billion.<\/p>\n

We love midcaps because they tend to be more domestic-focused than large caps, and therefore less exposed to geopolitical mayhem and the strong US dollar. In fact, both of those \u201crisks\u201d are benefits for Graco because it\u2019s profiting from multinationals\u2019 rush back to the US\u2014the so-called \u201conshoring\u201d trend.<\/p>\n

The company, which deals in fluid management-products (think paint sprayers and automatic lubrication systems for heavy equipment), relies heavily on the construction industry (48% of 2022 net sales). And while that does introduce some cyclical risk, onshoring, along with other trends, like the housing shortage and an ongoing flood of government infrastructure dollars, have a long way to run yet.<\/p>\n

Moreover, Graco does<\/em> have some diversification from the other 42% of its sales, which come from a wide array of sectors:<\/p>\n

Graco\u2019s 1.2% yield is uninspiring, but it\u2019s the payout growth we\u2019re interested in here: in late 2021, the firm announced a 12% raise and followed that up with another<\/em> 12% hike late last year\u2014its 25th and 26th straight hikes. Those big raises have pulled the share price higher, a reliable phenomenon I call the \u201cDividend Magnet\u201d:<\/p>\n

With a safe 47% of free cash flow paid out as dividends in the last 12 months and plenty of trends in its favor, Graco has what it takes to keep its dividend, and share price, popping.<\/p>\n

Insider Buy No. 2: An 8.3% Payer With (Rare) Management Skin in the Game<\/h2>\n

CEFs are among our top high-yield plays at Contrarian Income Report<\/em>,<\/em> for two reasons:<\/p>\n