Computershare Limited ($CMSQY) is one of the world’s largest direct stock purchase plan providers. The company oversees employee stock purchase plans for major corporations including FedEx, Walmart, Texas Instruments, Home Depot, Lockheed Martin, and American Express.

Despite its critical role in the financial industry, Computershare remains a relatively obscure company.

The stock receives minimal coverage on Seeking Alpha, and most YouTube content focuses on how to use the Computershare platform rather than the business itself.

Even Computershare’s own website provides limited insight into the company’s dividend policy. Bad news if you’re writing a stock research report. That said, the company’s obscure nature makes it a relatively cheap high-yielder with long-term market-beating performance.

Computershare is an Australian company whose American Depositary Receipts are fairly liquid and accessible through most major U.S. brokerage platforms. Even Robinhood, which is typically limited in its over-the-counter and ADR offerings, offers shares.

The stock currently trade at a price to earnings ratio of 22.98 and offers a starting dividend yield of 3.98%.

Over the past decade, the U.S.-listed shares have delivered an average annual total return of 14.98%. The company has also posted a 5-year compound annual dividend growth rate of 18.75%.

Founded in 1978, Computershare has grown into a global business that manages stock purchase plans for over 75 million customers.

Computershare generates revenue primarily through recurring administration fees, transaction processing, and interest income earned on client-held cash balances. Because employee stock plans are deeply embedded in corporate compensation structures, switching costs are high, and client relationships tend to be long-lasting.

In other words, Computershare is a sticky, wide-moat, recurring-revenue business.

While the firm’s valuation isn’t cheap, Computershare offers a higher starting yield than its peer Broadridge Financial Solutions ($BR). Computershare’s 5-year compound annual dividend growth rate is also higher, though Broadridge has delivered a stronger 10-year average annual total return.

The three biggest downsides for U.S. investors are the company’s lack of mainstream financial coverage, its semi-annual dividend policy, and the fact that Computershare is an Australian company subject to a 15% dividend withholding tax.

The upsides are that Computershare is a market-beating business with a near-4% starting dividend yield, a history of raising both semi-annual distributions, and shares that provide diversification outside of the U.S. monetary system. While that last benefit isn’t personally important to me, investors seeking international diversification may find it appealing.

I liked this business when it was trading for less than $17/share in early 2024, and I’d be happy to buy more now that Computershare is selling off and retracing the $20 price range.

A 4% starting yield from a market-beating company is rare, especially when it comes from an established business with tens of millions of long-term clients.

While Computershare isn’t a bargain-basement stock, its recent pullback offers long-term dividend investors an opportunity to accumulate shares of a high-quality, underfollowed business that plays a key role in the global financial system.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.