McCormick & Company, Incorporated (MKC), Dorman Products Inc. (DORM), and The Buckle, Inc. (BKE) Have Huge Inside Ownership

Apparel retailer The Buckle, Inc. (NYSE:BKE) sells a needed product, but clothes continually go in and out of fashion in an environment with many competitors. So, you may ask what’s so great about this company? The answer: large management ownership. Chairman Daniel Hirschfeld and CEO Dennis Nelson own 34% and 6% of the company respectively according to its latest proxy.

And, it shows. The Buckle, Inc. (NYSE:BKE) pays out a great deal more in dividends than it does on share buybacks, giving shareholders a tangible return on their investment. In 2012, The Buckle, Inc. (NYSE:BKE) did zero share buybacks opting to pay $255 million to its stockholders, most likely incentivized by the large ownership stake of its Chairman. The Chairman and CEO have served in their respective roles since 1991 which indicates stability, teamwork and deep knowledge of trends affecting the business enabling Buckle to go up against its multitude of competitors.

The company possesses excellent fundamentals. In 2012, revenue and free cash flow grew 6% and 11%, respectively. Its cash and investments balance of $180 million represent 62% of its stockholder’s equity with no long term debt.

In the chart below you can see Buckle’s total return exceeded the S&P 500 by a factor of five over the past five years.

BKE Total Return Price data by YCharts

On the whole, these three companies sell high demand products and have solid balance sheets backed by management and employees who partake in the risks and rewards making these companies worthy additions to your portfolio.

The article 3 Companies With Huge Inside Ownership for Your Portfolio originally appeared on Fool.com and is written by William Bias.

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