This Stock Should Continue Rewarding Shareholders With Predictable Dividend Growth For Years To Come
In business since 1905, C.H. Robinson (CHRW) is one of the
largest third-party logistics companies in the world. The firm acts as a
middleman in the transportation industry, helping connect companies that need
to ship goods with cost-effective transportation providers that have capacity
available via trucks, railroads, airlines, and ships.
C.H. Robinson doesn’t own hard transportation assets such as
trucks and is instead a service company that utilizes people and technology to
create transportation and supply chain advantages for its customers.
The company has more than 124,000 customers and maintains
relationships with over 76,000 carriers and suppliers, who it purchases
shipping capacity from on behalf of its customers. C.H. Robinson takes of cut
of each transaction and in return helps clients lower their costs, improve
efficiency, and reduce risk.
About 84% of company-wide profits are from C.H. Robinson’s
North American Surface Transportation segment, which consists of truckload and
less-than-truckload services.
Global Forwarding (ocean, air, and customs services)
accounts for another 10% of profits, and C.H. Robinson also has a small
sourcing business (6% of profits) that sources fruits and vegetables for
grocers and restaurants.
C.H. Robinson’s customer base is diversified, with 20% of
revenue generated from the food & beverage industry, 17% manufacturing, 14%
auto/industrial, 13% chemicals, 12% retail, and 24% other.
The company’s top 100 customers account for only 33% of
total sales, further underscoring its diversification. Around 16% of C.H.
Robinson’s net income is generated from operations outside of the U.S., and the
business is investing to become more global.
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