10 Dividend Knights that Beat The Market Last 3 Years

8. W.W. Grainger, Inc. (NYSE:GWW)

3-Year Share Price Gains as of  December 4: 142.4%

W.W. Grainger, Inc. (NYSE:GWW) ranks eighth on our list of the best dividend knights. The Illinois-based company provides a wide range of tools, equipment, and supplies to businesses, government entities, and institutions across various industries. It generates revenue through two primary segments: High-Touch Solutions (HTS) and Endless Assortment. The HTS segment serves as the company’s primary revenue driver. Known for its solid fundamentals, the company boasts an impressive shareholder rewards program and a reliable business model that has consistently delivered returns surpassing market averages over time. In the past three years, the stock has surged by over $142%, surpassing the broader market.

W.W. Grainger, Inc. (NYSE:GWW) generated $4.4 billion in revenues in the third quarter of 2024, up 4.28% from the same period last year. The company’s operating margin came in at 15.6%. Its gross profit also showed a 4% growth on a YoY basis at $1.72 billion. ClearBridge Investments highlighted the company in its Q1 2024 investor letter. Here is what the firm has to say:

“W.W. Grainger, Inc. (NYSE:GWW), in the industrials sector, was our largest new buy. Grainger is the biggest industrial maintenance, repair, and operations distributor in North America. The company is a share gainer in a large and fragmented market, with less than 10% share of the addressable market for their direct, “high touch solutions” business estimated at more than $165 billion. Grainger has also barely scratched the surface with its online “endless assortment” platform, Zoro.com, which targets an even larger market. In addition to its growth and profit potential, we are attracted to Grainger’s strong balance sheet and improved capital allocation under its current management.”

W.W. Grainger, Inc. (NYSE:GWW) has a strong balance sheet, supported by a healthy cash reserve. In the most recent quarter, the company generated $611 million in operating cash flow and also returned $328 million to shareholders in dividends and share repurchases. It has been rewarding shareholders with growing dividends for the past 53 years. Currently, the company pays a quarterly dividend of $2.05 per share and has a dividend yield of 0.69%, as of December 5.

Insider Monkey’s database of Q3 2024 indicated that 34 hedge funds owned stakes in W.W. Grainger, Inc. (NYSE:GWW), up from 32 in the previous quarter. The consolidated value of these stakes is $614.7 million. Citadel Investment Group was the company’s leading stakeholder in Q3 among these hedge funds.