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Mueller (MLI) Board Okays Dividend Hike, Debenture Redemption

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Mueller Industries, Inc. (MLI - Free Report) recently announced rewards for shareholders in the form of a hike in the quarterly dividend rate. Also, it noted that it will be redeeming subordinated debentures that are due to expire in 2027.

It is worth noting here that the company’s shares have gained 3.6% in the past two days. The closing price was $39.12 yesterday.

Inside the Headlines

Its board of directors approved a 30% hike in the quarterly dividend rate. The rate now stands at 13 cents per share. The previous quarterly dividend rate was 10 cents. On an annual basis, the dividend rate now stands at 52 cents per share, up from the previous rate of 40 cents.

The company will pay the revised quarterly dividend on Apr 2, 2021 to shareholders of record as of Mar 19, 2021.

Such shareholder-friendly policies reflect its strong cash position and growth potential.

With regard to redemption of debentures, a full notice will be extended to all holders on Feb 25, 2021. Available cash and borrowing from the revolving credit facility will be used for fulfilling the company’s redemption needs. Notably, the debentures to be redeemed carry an interest rate of 6% (annual).

Mueller effectively uses capital for growth investments, rewarding shareholders, lowering debts and making acquisitions. In 2020, the company used $22.3 million to distribute dividends and $5.6 million for repurchasing shares. Also, it used $246.9 million for repaying long-term debt.

Zacks Rank & Estimates Trend

With a market capitalization of $2.2 billion, Mueller currently carries a Zacks Rank #3 (Hold). In the past three months, the company’s shares have gained 15.3% compared with 21.1% growth recorded by the industry.



The Zacks Consensus Estimate for the company’s 2021 earnings is pegged at $2.48, indicating 0.8% year-over-year growth.

Mueller Industries, Inc. Price and Consensus

Mueller Industries, Inc. Price and Consensus

Mueller Industries, Inc. price-consensus-chart | Mueller Industries, Inc. Quote

Stocks to Consider

Some better-ranked stocks in the Zacks Industrial Products sector include Chart Industries, Inc. (GTLS - Free Report) , Kadant Inc. (KAI - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) . While both Chart Industries and Kadant sport a Zacks Rank #1 (Strong Buy), Applied Industrial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, earnings estimates for these companies have improved for the current year. Further, average earnings surprise in the last reported quarter was 58.75% for Chart Industries, 18.46% for Kadant and 28.95% for Applied Industrial.

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