Pool Corp. (POOL - Analyst Report) recently announced its decision to hike its quarterly dividend by 19.0% to 19 cents per share. The increased dividend will be paid on May 30, 2013 to stockholders of record as of May 15.
This represents the eighth dividend increase by Pool since it started paying dividends in 2004 and brings the forward annual dividend yield as of May 3, 2013, to 1.51%. The current hike comes exactly after a year. The company had last increased its dividend in May 2012, from 14 cents to 16 cents, which was paid on May 30, 2012.
Headquartered in Covington, La., Pool Corporation is the largest wholesale distributor of swimming pools and related backyard products. Currently, it operates 318 sales centers in North America and Europe. The company has a consistent track record of paying quarterly dividends.
Pool also has a share buyback program in place. During the first quarter of 2013, Pool’s share repurchase activity was minimal but expects to accelerate the same during the balance of the year.
At the end of first quarter 2013, cash and cash equivalents increased about 3.2% year over year. However, Pool’s long-term debt also increased 20.6%.
We appreciate Pool’s efforts to consistently enhance long-term shareholder value even in times of an economic downturn. We believe that an increase in dividend payment affirms the company’s optimistic outlook and depicts that it is heading toward strong future growth. Management’s earnings per share guidance for 2013 includes 15−20% growth, which we believe, would lead to further increase in dividend.
Pool currently holds a Zacks Rank #2 (Buy). Some companies from the leisure and recreational products sector that are worth a look include Smith & Wesson Holding Corp. (SWHC - Snapshot Report), Sturm, Ruger & Co. Inc. (RGR - Snapshot Report) and Polaris Industries Inc. (PII - Snapshot Report). While Smith & Wesson and Sturm, Ruger hold a Zacks Rank #1 (Strong Buy), Polaris carries a Zacks Rank #2 (Buy).