One stock I've regularly recommended to dividend seekers in particular over the past couple of years is Dicker Data Ltd (ASX: DDR). Today it hit a record high of $5.70 per share to mean it's up around 130% since May 2017 while paying out fully franked quarterly dividends between 4 and 7 cents along the way.
It reports on a calendar year basis and on May 8 of this year it flagged that it expects profit before tax for the quarter ending March 31 2019 to come in around $13.5 million to mean it's on course to easily beat its full year guidance for pre-tax profit to be $51.4 million.
In other words this was a profit upgrade in all but name, and one reason the company may not have been keen to dress it up as such was because its chief operating officer was backing up the truck to buy around $250k worth of shares on market around April 24.
As I flagged in this subsequent April 26 article, Attention: The Dicker Data COO is backing up the truck for more shares this was a strong buy signal given the COO already owned some 600,000 shares and was unlikely to put more of his net wealth into the business unless he was very confident in its short term outlook.
In mid-April when the COO bought the shares sold for $4.05 compared to $5.50 around one month later.
I didn't act on the insider buying signal myself as Dicker Data was already among my top 5 holdings and given its debt load and thin margins I wouldn't rate it as the kind of business to go all in on.
However, I've previously mentioned before that I don't know of a business on the ASX with better alignment between senior management / founders (who still own around two thirds of the business I believe) staff (all DDR staff are granted shares I believe) and shareholders. Moreover, the insiders like the COO have consistently been buying up more shares over time.
Even at $5.50 Dicker Data still offers investors a fully franked 4% dividend yield based on expectations for 22 cents per share in dividends over the 12 months ahead. Arguably that's still strong for a business growing at double-digit rates and you'd be hard pushed to find consistent double-digit growth and a 4% plus yield elsewhere on the ASX. In fact if anyone does know of this kind of business please do let me know.
