As you might have read about it here, I now do live webinars and certainly have fun doing so. I have been surprised by the positive interest attendees had towards many of my stock picks. This is how I came to the idea of sharing here some of my “Video of the Week”, during wich I go through a company recent news or results and explain why I believe it is currently a good or a bad pick for a dividend investor.
0:00:00.9 S1: Hey fellow investors, this is Mike McNeil from Dividend Stocks Rock. Today I wanna talk about Gentex, ticker is GNTX, a small company doing auto-dimming mirrors, flying on the radar on most dividend growth investors, actually this is why I wanna discuss it. But before I… Just a small disclaimer, so everything that you are seeing on this video, everything that’s being produced by Mike McNeil under the banner of The Dividend Guy Blog or the Dividend Stocks Rock, is not to be taken as stock recommendation or financial advice. In fact I am not your personal broker, I am not your advisor, therefore you cannot sue me if you’re losing money after watching this video. I strongly urge you to do your own due diligence. And on the good side of things, you won’t have to pay me a dime if you’re making money.
0:00:52.6 S1: So yeah, so Gentex is a small company, dominating a niche market which are auto-dimming mirror. It used to be luxury products add-on on vehicles like Cadillacs and stuff like that. Right now about 25% of cars are having auto-dimming mirrors. But what is very interesting is 92% of them are made by Gentex. As regulations and safety concerns are growing, chances are auto-dimming mirrors will come to medium and cheap cars. So therefore, there are plenty of growth for Gentex for the next 10 years with this technology. And don’t worry about it, it is fully protected, a thousand patents around those tech… This technology and the company is investing massive money in R&D to make sure that it keeps on edge against its competitor.
0:01:52.2 S1: It is also using this technology now to create auto-dimming windows for aircraft, so this is another growth vector for the company in the years to come. Then again a little bit of a luxury product, but as it becomes the standard, Gentex will dominate another market over there. And in Europe they also have a SmartBeam technology, those are beams that are going from high beams to low beams as they cross another vehicle. So it’s quite popular in Europe, not too much in North America so far; however it is coming. As I said regulations, safety concerns, so everything around automotive right now is about more safety. And Gentex is playing that game. They also develop fire protection productions and… Products, sorry, and automotive electronics. So, all those new features, new products will also push Gentex to another level.
0:02:54.5 S1: Interesting fact, revenue growth double digit over the past 10 years… Over the past five years at 10% annualized growth rate. Earnings per share 18% annualized growth rate over the past five years. And dividend, of course I’m a dividend investor, we have a growth of 8.5% annualized growth over the past five years. You wanna know what is the best part of it? Payout ratio right now is around 26%, which means that a combination of strong world vectors and management that is already shareholder-friendly, you’ll have lots of payouts increase in the upcoming years. Gentex has proven its commitment towards its dividend growth policy already. They have successfully increased its dividend for the past seven years. And finally the stock has been doing very well in the market. But it’s still under valued according to our dividend discount model calculations.
0:03:53.0 S1: If you wanna hear more about Gentex or any other videos I make, please follow the link after the… This video ends. Join The Dividend Guy Blog newsletter. I’m sending one newsletter for free per month and I’m also advising you on… Not advising you but telling you that I’m pulling out new videos. This was Mike McNeil from Dividend Stocks Rock, don’t forget to subscribe to my YouTube channel and take good care.