Dividend Share Purchase – Big Yellow Group

Big Yellow Group

I’ve been scounting around for some companies I’d like to buy.  My selection criteria are still evolving, but broadly speaking i’m looking for dividend paying mid caps with the potential to increase their dividend over the long term.

My Key rules are:

  • Don’t lose money.
  • Find companies with a dividend of roughly 3%.
  • Increasing earnings per share.

Enter Big Yellow Group

A few years back…  or more precisely, a decade ago, I put some furniture in storage for a few months.  I would have been better off just selling it all but that’s an aside.

The storage company I used was Big Yellow Self Storage.  Everything was slick and efficient.  The setup of the account and room was effortless.  You sign a few forms and are put on a recurring monthly direct debit, you are then given a pin for 24 hour access to the warehouse housing your storage unit.

Units are available in a range of sizes with tiered pricing.  Each room is very secure with solid doors, solid locks and all of the corridors are monitored by CCTV.

I don’t want to sound too much like an evangelist for the company, so to conclude, everything was just super efficient.

Share Price Has Doubled

In the last 10 years, in no small part due to the slick operation, the company has grown and become firmly established as the market leader.  In the last few weeks the price has dipped enough to tempt me in.

I bought a chunk of shares at the price 717.5p.  Last years dividend totalled 24.9p which equates to a yield of 3.47%.

In 2012 the dividend was 10p per share.  So it’s up almost 150% in 4 years.  The dividend cover is 1.3% and the revenue has been increasing each year.

Big Yellow looks to be in a strong position leader and hopefully will serve me well as the first block in my dividend portfolio.

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