Heidrick & Struggles: A Premier Long-Term Dividend Play

The executive search space is unfamiliar to most. Executive recruiters, or ‘headhunters’ in the parlance of the industry, prefer to stay in the shadows as they conduct their business
Yet behind the scenes the executive search space is one of the most lucrative businesses in the world. A true service industry with almost no cost of goods sold, recruiting firms can make some of the most eye-popping margins in all of business - and are always flush with cash. Heidrick & Struggles (HSII) is one of the oldest and most venerable institutions in the business, and in its relationship-intensive industry, this is a marked advantage.
Multiple factors, both past and present, combine to make Heidrick & Struggles one of the best long-term, secure, dividend plays on the market.
Dividend
Heidrick & Struggles paid its first dividend of $0.13 in October of 2007 (Source: Nasdaq). As the financial markets were thrown into chaos and the world economy began to melt, Heidrick wanted to signal just how solid its business was - and did. Since then they have paid a dividend of $0.13 every single quarter (Source: Heidrick & Struggles), and there is no indication that they intend to stop this practice. As I will show below, factors are aligned such that there is no reason they will need to stop.
Fundamentals of the Business
The recruiting business has almost no capital expenditures. To recruit all you really need is a telephone; of course, a nice... Read more

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