Back to top

Analyst Blog

Security and protection services provider The ADT Corporation (ADT - Analyst Report) recently announced a 60% year-over-year hike to its dividend payout. The quarterly dividend now comes to 20 cents or 80 cents per share on an annualized basis. The increased cash dividend is payable on Feb 19 to shareholders of record as of Jan 29.

Based on the closing price of $39.08 on Jan 10, 2014, the proposed dividend translates into a yield of 2.0%. A steady dividend payout is part of the long-term strategy of ADT to provide attractive risk-adjusted returns to its stockholders. The company has paid a steady dividend ever since its inception as a standalone listed firm in Oct 2012.

Headquartered in Boca Raton, Fla, ADT offers electronic security products along with a wide range of interactive home and business automation and monitoring services for residences and small businesses in the U.S. and Canada.

ADT’s electronic security and home/business automation solutions primarily include installation and monitoring of residential and small business security and premises automation systems. These products are designed to detect intrusion; control access; react to movement, smoke, carbon monoxide, flooding, temperature and other environmental conditions and hazards; and address personal emergencies, such as, injuries, medical emergencies or incapacitation.

ADT has a single operating segment. The products and services of the company comprise ADT Pulse interactive home and business solutions, home health services, and monitoring center supported personal emergency response system products and services. The company also provides technical services for the maintenance and installation of upgraded or additional equipment. ADT delivers an integrated customer experience by maintaining the industry's largest sales, installation and service field force along with a robust monitoring network.

Moving forward, ADT expects to grow its core business by increasing operating efficiency and providing risk-adjusted returns to its shareholders. In fiscal 2014, total revenue growth is expected to be in the range of 4%–5%. EBITDA margin before special items is expected to improve 150 basis points over a three-year period with a 50 basis point improvement in fiscal 2014. Free cash flow before special items is expected to be in the range of 5%–10%.

ADT currently carries a Zacks Rank #2 (Buy). Other stocks that are worth considering in the industry include Nielsen Holdings N.V. (NLSN - Snapshot Report), Verisk Analytics, Inc. (VRSK - Snapshot Report) and McGraw Hill Financial, Inc. (MHFI - Analyst Report), each carrying a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

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 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
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%