C.H. Robinson Worldwide

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Likewise, business is booming for C.H. Robinson Worldwide ( CHRW). The firm is a $9 billion third-party logistics provider, offering firms truck brokerage, air and ocean freight forwarding, and a number of supporting services. With the rising price of crude oil pushing transportation costs ever higher, CHRW's services are in-demand right now, and they should continue to be popular as the complexities of shipping increase.

At its simplest, C.H. Robinson is in the business of pairing off shippers with carriers as efficiently as possible. Because CHRW has the scale to handle the needs of both parties quickly and cheaply, it's one of those services that both parties are willing to support. The danger with that middle-man position, of course, is that if it becomes too profitable, one of the sides is likely to step in and take the profits for themselves.

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But in CHRW's case, scale has big advantages, namely buying power that carriers and shippers don't have without exposing themselves to massive risks. That factor should keep the firm's business protected from rivals.

With an asset-light business model, most of CHRW's costs go into commission compensation for its sales team. That's a good thing because it means that those expenses tend to ebb and flow with sales volumes and keep margins relatively flat. And predictable margins are a must-have for dividend investors.

Right now, CHRW pays out a 33-cent quarterly dividend, a 2.33% yield at current price levels. With plenty of cash getting thrown off from operations right now, I'd expect to see a dividend hike in the next quarter.

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-- Written by Jonas Elmerraji in Baltimore.


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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.

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