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November contribution's: $2,200 (new record) 100% taxable account. November soundtrack: 🔊 🎶 Cassie - Me & U, ❤ Dr. Dre Ring Ding Dong ❤, Lil Wayne - Go DJ, Ludacris - Act A Fool (2Fast 2Furious), K Camp - Cut Her Off ft. 2 Chains, Ciara - My Goodies ft. Petey Pablo 🔊 🎶.
On top of all of that, I bought the PS5 with Ratchet & Clank: Rift Apart to start with. So I'm rollin smooth as f$$k over here. I Apologies to my Xbox fans but I'm with Playstation this time. Besides I had to reunite with my favorite characters from Sony ❤ (my best pals) Ratchet & Clank. (Fun fact: I've been playing the Ratchet & Clank series for almost 20 years since I was like 7 years old.) Anyways enough on that, you came here to hear about my long-term single stock investing strategies not about video games lol. Alright, so this month I will reveal another single pick from my "very strict watchlist". You're going to notice a pattern with my unique Total Return style. I build up my single stock picks based on a foundation of solid core metrics. Before we get to the good stuff scroll past the dividend income to continue.
Roth IRA
Total: $96.62
Taxable Account
Total: $11.77
Grand Total: $108.39
Purchases: 6 shares of ODFL ($2,120.58) ⬇⬇⬇ keep scrolling.
(Company summary from Seeking Alpha)
Old Dominion Freight Line, Inc. operates as a less-than-truckload (LTL) motor carrier in the United States and North America. It provides regional, inter-regional, and national LTL services, including expedited transportation. The company also offers various value-added services, such as container drayage, truckload brokerage, and supply chain consulting. It owns 9,288 tractors and 42 maintenance centers. As of August 3, 2021, it owned 248 service centers. Old Dominion Freight Line, Inc. was founded in 1934 and is based in Thomasville, North Carolina.
I've been listening to the previous quarterly earnings calls to get a general idea of what management is doing as far as forwarding growth in the business. I love the simple mindset of ODFL CEO Greg Gantt, with the steady year-over-year growth in all categories of this LTL trucking business. (LTL stands for "less than truckload"). It's basically multi-stop delivery, instead of loading up the trailer full for just a single destination. They load it with a variety of products for multiple customers. Multiple customers = multiple stops. A very basic meaning of LTL. Listening to these 1 hour long quarterly earnings calls just gives me so much information that you probably couldn't find on the internet. For example, Ceo Greg Gantt said that they can still hire more drivers, but they have to work a little harder to maintain the same employee growth like they did in the past. He described that they have to focus on increasing their wages, their referral bonus, and their sign-on bonus. Overall I just love the consistent quarter-over-quarter growth back to back. For me, this is a long-term high conviction play, and as a bonus, it adds some form of diversification to the taxable account. The account is going to stay real tight but a little sprinkle of diversification doesn't hurt. Especially if it fits into my total return style with AAPL being my baseline benchmark.
(ODFL) Old Dominion Freight Line
I'm going to list down some of its stats. Dividend yield = 0.25%, Dividend payout ratio = 9.15% Dividend growth CAGR (Compounded Annual Growth Rate) 3-year CAGR = 32.15%, the 5 & 10-year CAGR will be calculated Seeking Alpha.com over the next few years of additional dividend raises. The 5-year data should show up sometime in 2022. A dividend growth chart is below.
ODFL has only been paying out a dividend since 2017 so they have raised their dividend every year since they started paying out dividends. Since 2017 over the last 5 years, ODFL has grown its annual dividend payout by over 185%+ since its first year of dividend payouts. They almost tripled their annual payout within that time frame. A young dividend growth history supported by a business that's been around since 1934. With a 9% payout ratio, they could give out a 25% dividend raise over and over again if they wanted to.
10-year total return comparison
As always AAPL (Apple) is like my personal custom S&P 500. As you can see in this total return comparison ODFL DESTROYS UPS & FedEx, but hey people on Facebook like to say things like " just invest in great companies"..............I invest in superior metrics. Sure they are great companies...........what about great performance? Superior dividend growth? Superior net cash flow growth? Aggressively paying down their debt? Aggressive double-digit ROIC (return on invested capital)? When you truly do your absolute due diligence in single stock investing, you start to see the real truth behind the stocks that everyone talks about on Facebook. Especially with the total return comparisons. Let's continue down to some of the other key metrics of ODFL.
Consistent growth in yearly revenues & net cash over the last 18 years. With an 11.5% CAGR.
ROIC - Return on invested capital, the rate of return from when a business reinvests excess capital back into itself. A very important metric for analyzing the internal growth of a company. Strong double-digit ROIC combined with decreasing debt. This business is always setting itself up to be in a solid financial position to give out those massive double-digit dividend raises.
Market share growth across the board is another key metric to look at. Market share growth usually supports future growth. (Disclaimer: I always look 10 years out into the future, not 10 months) Alright so that's it for this one I think I made this fancy enough. I'm ready to go play Ratchet & Clank again on my PS5 so I hope you enjoyed this update and ill see you next time.
