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Fortune Brands' (FBHS) Board Okays 10% Hike in Dividend Rate

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Fortune Brands Home & Security, Inc. has announced that it is rewarding shareholders in the form of a hike in the quarterly dividend rate. This increment marks the company’s 6th consecutive year of a dividend rate increase in double digits.

We believe that such shareholder-friendly policies reflect the company’s strong cash position and its commitment toward returning high value to shareholders.

Inside the Headlines

As revealed, Fortune Brands’ board of directors approved 10% or 2 cents per share hike in the quarterly dividend rate, which now moved from 20 cents to 22 cents. On an annualized basis, the dividend increased to 88 cents from 80 cents per share.

Fortune Brands will pay the revised dividend on Mar 13, 2019, to shareholders of record as of Feb 22.

Sound Shareholder-Friendly Policies

Fortune Brands firmly believes in rewarding shareholders handsomely through dividend payments. Over the last five years (2013-2017), the company hiked the dividend rate every year, increasing the annual rate of 30 cents in 2013 to 72 cents in 2017.

Further, the company paid a cash dividend of 78 cents per share or approximately $113 million in cash to its shareholders in the first nine months of 2018.

Zacks Rank & Stocks to Consider

With a market capitalization of $5.9 billion, Fortune Brands currently carries a Zacks Rank #4 (Sell). Weakness in security operations, rising cost of sales, high freight charges and huge debt levels seem to be the prime concerning factors.

Weak sentiments toward the stock can also be seen from the downward revision in earnings estimates for 2018 and 2019. The Zacks Consensus Estimate for earnings per share is currently pegged at $3.43 for 2018 and $3.86 for 2019, reflecting the decline of 5.8% and 7% from the respective tallies 60 days ago.

Fortune Brands Home & Security, Inc. Price and Consensus
 

Fortune Brands Home & Security, Inc. Price and Consensus | Fortune Brands Home & Security, Inc. Quote

Further, the company’s stock price has decreased 22.2% in the past three months compared with the industry’s 15.5% decline.



We believe that Fortune Brands’ shareholder-friendly strategies might help in boosting its investment appeal.

Some better-ranked stocks in the Zacks Industrial Products sector are Ituran Location and Control Ltd. (ITRN - Free Report) , DXP Enterprises, Inc. (DXPE - Free Report) , and EnPro Industries, Inc. (NPO - Free Report) . All these stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for each of these stocks improved for the current year. Further, positive earnings surprise for the last quarter was 30.43% for Ituran Location and Control, 17.95% for DXP Enterprises, and 23.64% for EnPro Industries.

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