One of the first companies I reviewed when I entered the investment newsletter business in 1982 was Dover (DOV), recalls Chuck Carlson, dividend reinvestment expert and editor of DRIP Investor.

The stock has come along way since that review, with the shares rising from a split-adjusted price of around $2 per share to its current level of more than $170 per share.

The strong performance indicates just how well investors can do buying and holding quality stocks. But I think the bullish story is still ongoing at Dover.

The stock’s recent price action has been solid, boosted by especially strong numbers in the latest quarter and indications that business will remain strong into next year.

The stock should outperform the broad market for the remainder of the year, and the next 39 years (that’s how long it’s been since my initial review) should be rewarding for investors.

Dover operates in five business segments:

  • Engineered Products — Services here include transporting and transforming solid waste stream into sustainable resources; manufacturing work-handling automation components; providing radio frequency and microwave filters for defense and aerospace markets; and developing vehicle lifting, wheel service, and collision-repair equipment.
  • Fueling Solutions — This segment provides advanced fuel dispensing equipment, electronic systems and payment, and fluid-handling and car-wash equipment.
  • Imaging & Identification — Dover’s businesses here manufacture product-identification and printing solutions, including inkjet, thermal transfer, laser, and engineering solutions.
  • Pumps & Process Solutions — This segment provides products for the safe handling of fluids across the chemical, health care, oil and gas, and industrial markets. A nice growth driver in this segment is demand for the company’s biopharma connectors and pumps.
  • Refrigeration & Food Equipment — This segment develops and supplies equipment for the commercial refrigeration, foodservice and beverage equipment, and heating & cooling markets. An example of a service here is the firm’s high-speed trimming, necking, shaping, and inspection technology for makers of beverage cans and containers.

Dover is seeing strong trends across all of these businesses. Indeed, every single operating segment posted organic revenue growth of at least 20% in the June quarter.

What’s more, each of the five business segments posted organic revenue growth versus pre-pandemic second quarter 2019. Backlog in the second quarter was up 16% sequentially, 69% year over year, and 82% versus 2019’s second quarter. Backlog is not the only thing trending higher.

Dover is not a cheap stock, but nor is it necessarily excessively value. Yielding 1.2%, the stock offers attractive total-return potential. Please note Dover offers a direct-purchase plan whereby any investor may buy the first share and every share directly from the company. Minimum initial investment is $500.

The firm recently increased its dividend to a quarterly rate of $0.50 per share. The increase marked the 66th consecutive year the firm boosted its dividend.

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