Back to top

Analyst Blog

Raven Industries Inc. (RAVN - Analyst Report) announced that its Board has approved a 14% increase in its regular quarterly dividend. This represents the 27th consecutive hike in its dividend.

Raven will now pay 12 cents per share to its shareholders, 1.5 cents more than the prior dividend of 10.5 cents per share. The increased dividend will be paid on April 25, 2013, to shareholders of record as of April 10, 2013.

Raven recently reported fourth-quarter fiscal 2013 (ended Jan 31, 2013) earnings of 30 cents per share, flat year over year. It beat the Zacks Consensus Estimate by 5 cents. Sales decreased 7% year over year to $89.6 million, missing the Zacks Consensus Estimate of $95 million. Revenues fell as higher sales in the Applied Technology Division was offset by declines in the the other two segments, Engineered Films and Aerostar.

Raven reported record fiscal 2013 earnings of $1.44 per share, up 4% annually, ahead of the Zacks Consensus Estimate of $1.39. Sales increased 6% year over year to a record $406.2 million, yet missed the Zacks Consensus Estimate of $409 million. The hike in revenues was driven by higher sales in the Applied Technology Division and Engineered Films, partly offset by a decline at Aerostar.

Raven exited fiscal 2013 with cash and cash equivalents of $49.3 million, up almost two-fold year over year. The company has no debt on its balance sheet.

Our Take

Raven’s Engineered Films segment continues to benefit from strong demand for geo membrane films. Demand for geo membrane films, meant for environmental protection, is on the rise as customers are keen on protecting water and other environmental resources for a sustainable future. This will provide a boost to Raven’s revenues, moving ahead.

Raven continues with its strategy of investing significantly in research and development, thereby helping it to maintain strong financial results. In addition, Raven has ample scope to fund future growth with the support of debt-free balance sheet and solid cash flow.

However, the near-term results of the Aerostar segment will be affected by the lack of aerostat orders. Revenues at the Engineered Films segment will remain affected due to continued energy market weakness.

S. Dak.-based Raven is an industrial manufacturer providing a variety of products for the agricultural, industrial, construction and military and aerospace markets. Raven operates through four business segments: Engineered Films, Electronic Systems, Applied Technology and Aerostar.

Raven currently holds a short-term Zacks Rank #4 (Sell).

Other stocks worth considering in the same industry where Raven operates are Crane Co. (CR - Snapshot Report), Macquarie Infrastructure Company LLC (MIC - Snapshot Report) and Textron Inc. (TXT - Analyst Report) with all holding a Zacks Rank #2 (Buy).
 

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