Back to top

Analyst Blog

TransDigm Group Incorporated (TDG - Analyst Report),the world’s leading supplier of highly engineered proprietary aerospace components has decided to reward its shareholders with a special dividend.

The board of directors approved a special dividend of $22 per share, which was a robust increase of almost 71.2% than its last payout of $12.85 – a special dividend paid last November. However, the company does not usually pay dividends. Instead it pays out occasional endowments in the form of a special distribution. The special dividend equates to a 14.3% yield at current levels of $154.70 and will be paid on Jul 25 to shareholders of record as of Jul 15.

TransDigm also announced the procurement of a fresh incremental term loan of $900 million at a rate of 3.8%, which will be utilized to reward its shareholders. However, this was further backed by the proceeds from the recent issue of 7.5% senior notes worth $500 million of the principal amount in aggregate due 2021.

At the end of the second quarter of 2013, TransDigm had cash and cash equivalents of $680.02 million with long-term debt of $4.3 billion. With this current disposition, the company expects a cash balance of $450 million by the end of fiscal 2013 with an available revolver of approximately $300 million. Further, this will help meet the company’s operating and acquisition requirement.

With its strong free cash flow and meticulous capital structure, TransDigm seems to be utilizing its resources for inorganic growth and boosting shareholders’ wealth, which will help it boost its core operations. The company’s financial performance continues to reflect its proven operating strategy as one that consistently creates real intrinsic value for shareholders.

Shares of this leading global designer, producer and supplier of highly engineered aircraft components, hit a new 52-week high twice in the last four months. Riding on this news, the stock experienced a 1.34% rise on Jul 3, 2013 compared to its previous day close.

TransDigm currently carries a Zacks Rank #3 (Hold). Some other stocks in the industry worth mentioning are Kratos Defense & Security Solutions, Inc. (KTOS - Snapshot Report),  Astronics Corporation (ATRO - Snapshot Report) and HEICO Corporation (HEI - Snapshot Report), all carrying a Zacks Rank #1(Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
FELCOR LODG… FCH 10.47 +3.46%
OLD DOMINIO… ODFL 63.48 +1.18%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
LENOVO GROU… LNVGY 27.07 +0.04%