Chemtrade Logistics (TSX:CHE.UN) is one of Canada’s top dividend stocks, even if few investors are aware of it. With a $1 billion market cap, the company is simply too small for most analysts. That allows its 10.8% annual dividend to fall through the cracks.
Before you say that the payout is unsustainable, know that Chemtrade has been paying the same dividend for more than 13 years. It didn’t even cut the payout during the financial crisis of 2008 and 2009.
Chemtrade makes its money by distributing specialty industrial chemicals. When it comes to distribution, scale is king. It allows Chemtrade to buy inputs and deliver them to customers cheaper than the competition.
These inputs are pure commodities, so whichever company can offer the lowest price wins. With a structural scale advantage, Chemtrade has been winning that battle for decades.
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