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Maximizing your income stream through dividend stocks is an integral part of my investment strategy. It’s an underrated stock that I think could be a good option for me. 4 printing group (Lessie: four). Here’s why.
As a quick reminder, 4imprint is a business that specializes in promotional marketing materials for businesses. Creates and sells materials such as branded pens, bags, mugs, banners and more to businesses to enhance their marketing efforts.
So what’s going on with 4imprint shares right now? They’re burning at 3,720p as I write. This time last year, the stock was trading for 2,882p, an increase of 29% over the 12-month period. 4Print shares have bounced back well from the March stock market correction caused by the tragic events in Ukraine.
Passive income accumulation with risks
First, marketing budgets and 4imprint’s performance have come under pressure in recent times. First, the pandemic had a negative impact as the stay-at-home order forced companies to cut marketing costs to save money during the transition period. 4imprint is back from this based on recent performance improvements.
Another aspect is the current economic crisis with high inflation. This increase in prices can cause companies to worry about other important expenses, which may again reduce their marketing spend.
Next, it’s important to remember that, like any investment, dividends are not guaranteed. They may be canceled at any time at the discretion of the business. This is to save money in the event of a pandemic or financial crisis or, for example, a recession.
Why I like 4imprint shares
So onto the positives then. I am pleased that 4imprint has a good performance record over a long period of time. I know that past performance is no guarantee of future. However, looking back, sales and profits have doubled in the last five years.
Next, for any given stock, I want to know the dividend yield. At the current level, it stands at 1.5%. This is where I feel the stock may be low. This is because the business has a healthy balance sheet with plenty of cash that I expect to return to shareholders as it continues its impressive performance and growth trajectory.
Ultimately, post-pandemic demand will serve 4mprint well and boost its performance and returns, in my opinion. With a recent marketing update, he said customer demand is at a high level, which should lead to an increase in sales momentum and the ability to reach the $1 billion sales target for the fiscal year.
Overall, I believe 4imprint Group is a passive income stock that should grow its rate of return well over the long term. This fits well with a buy-and-hold approach. Its cash-rich balance sheet, the fact that it’s operating in a growing market, and its current dividend make my investment case high. I plan to add 4imprint shares to my holdings in the coming days!