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Neenah Paper (NP) Hikes Quarterly Dividend Payout by 11%

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Neenah Paper, Inc. , a global manufacturer of technical products and fine papers, recently announced an 11% year-over-year hike in its quarterly dividend payout. The new dividend will be 41 cents per share or $1.64 on an annualized basis. It will be payable from first-quarter 2018.

Based on the closing price of $89.20 on Nov 29, the proposed dividend affirms a yield of 1.8%. A steady dividend payout is part of the long-term strategy of Neenah to provide attractive risk-adjusted returns to its stockholders. In addition, healthy dividend increases at periodic intervals have been one of its strengths.

This is the eighth consecutive double-digit dividend increase for Neenah since December 2012. Since its inception in 2004, the company has paid dividend in every quarter. In addition, it has hiked dividend at a CAGR of 22.7% during the last six years.

The current hike reflects the inherent financial strength of the company and strong cash flow generated from continued focus on high-margin businesses and a healthy execution of operating plans. The company has outperformed the industry in the last three months with an average return of 15.5% compared with 7.3% for the latter.



Neenah also announced a new share repurchase program, under which it can repurchase up to $25 million worth of stock after the existing share repurchase program expires on Dec 31, 2017. Over the years, Neenah has consistently returned significant cash to its shareholders through dividends and share repurchases. The company’s investment strategy takes a holistic view of the rapidly evolving market and has a dynamic capital allocation approach to focus on the relative value of the various sectors within the broader industry. We remain encouraged by such focused attempts of the company to maintain a steady growth curve.

Neenah presently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Sappi Limited (SPPJY - Free Report) , Stora Enso Oyj (SEOAY - Free Report) and UPM-Kymmene Oyj , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sappi has a long-term earnings growth expectation of 7.6%.

Stora Enso has a long-term earnings growth expectation of 9.6%.

UPM-Kymmene Oyj has an expected long-term earnings growth rate of 5.1%.  

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