High-Yield Dividend Stocks: Douglas Dynamics (PLOW)
Sector: Auto parts
Dividend Yield: 5.3%
Market Cap: $370 million
Never heard of small-cap Douglas Dynamics (PLOW)? Well, the ticker says it all; Douglas produces plows, salt and sand spreaders and other “snow control equipment” for use on trucks of all shapes and sizes. It’s also one of the most stable dividend stocks you can buy.
It was a bumper year for Douglas, what with the polar vortex, which has created a nice tailwind both for shares and for dividend payments. Since February lows, PLOW stock is up about 15% to trounce the 7% gain for the S&P 500 in the same period.
Of course, the “polar vortex” that fueled big demand for salt and plows isn’t a sure thing every quarter. However, it’s safe to say that it’s going to snow every winter for the foreseeable future and Douglas has a steady stream of business from governments and commercial plowing services as a result of its strong market position.
If you want stability, banking on cold and ice every winter seems like a good strategy. And even if shares don’t continue the recent momentum higher, the hefty 5.3% dividend yield is a very nice alternative to “high yield” savings accounts that offer less than 1% annual interest to investors.