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Fastenal (FAST) Hikes Dividend by 13% to Reward Investors
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Fastenal Company (FAST - Free Report) gained 2.76% in the after-hour trading session on Jan 18 after it announced a 12.9% hike in its quarterly cash dividend. This national wholesale distributor of industrial and construction supplies will pay out a quarterly dividend of 35 cents per share on Mar 2, 2023, to shareholders of record as of Feb 2.
The company currently has a dividend payout ratio of 66% and a dividend yield of 2.57% based on the closing share price of $47.54 on Jan 18. Over the past two decades, Fastenal has been paying out annual dividends. Also, it paid out special one-time dividends in December 2008, December 2012 and December 2020.
With the recent move, FAST is maintaining its commitment to increase stockholders’ returns regularly. The move reflects the company’s sound and stable financial position, and commitment to rewarding shareholders amid industry-wide challenges.
Will This Sustain?
Fastenal has been paying cash dividends since 1991. It has been consistently sharing its cash flows with shareholders and maintaining a strong financial position. It ended third-quarter 2022 with cash and cash equivalents of $231.5 million versus $236.2 million at 2021-end. The company has sufficient funds to meet the short-term obligation of $150.3 million. Operating lease liabilities, net of the current portion, at September-end were $161.2 million, slightly up from $156 million at 2021-end. Nonetheless, it has no significant debt maturity in recent years.
Image Source: Zacks Investment Research
Additionally, cash provided by operating activities was $257.9 million for third-quarter 2022 versus $167.4 million a year ago. This reflects significantly improved levels of cash flow for the quarter. The company’s financial strength, access to low-cost capital and ability to generate cash flow provide confidence to its stakeholders.
Investors always prefer a return-generating stock. A high-dividend-yielding one is much coveted. It goes without saying that stockholders are always on the lookout for companies with a record of consistent and incremental dividend payments.
Although shares of the company underperformed the industry in the past year, earnings estimates for 2023 moved up to $1.92 per share from $1.90 in the past 30 days. The trend is likely to continue, given its solid cost-control measures, combative investment to increase Onsite locations and focus on e-commerce business. The company is benefiting from higher demand for industrial capital goods and commodities, which are offsetting softer markets tied to consumer goods and relatively lower growth in construction.
Darden carries a Zacks Rank #2 (Buy). DRI has a long-term earnings growth rate of 9.8%.
The Zacks Consensus Estimate for Darden’s 2023 sales and earnings per share (EPS) suggests growth of 7.9% and 5.5%, respectively, from the year-ago period’s reported levels.
McDonald's carries a Zacks Rank #2. MCD has a long-term earnings growth rate of 8.2%.
The Zacks Consensus Estimate for McDonald's 2023 sales and EPS suggests growth of 3.2% and 5.3%, respectively, from the year-ago period’s reported levels.
Yum! Brands currently carries a Zacks Rank #2. YUM has a long-term earnings growth rate of 11.8%.
The Zacks Consensus Estimate for Yum! Brands’ 2023 sales and EPS suggests growth of 6.2% and 15.5%, respectively, from the year-ago period’s reported levels.
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Fastenal (FAST) Hikes Dividend by 13% to Reward Investors
Fastenal Company (FAST - Free Report) gained 2.76% in the after-hour trading session on Jan 18 after it announced a 12.9% hike in its quarterly cash dividend. This national wholesale distributor of industrial and construction supplies will pay out a quarterly dividend of 35 cents per share on Mar 2, 2023, to shareholders of record as of Feb 2.
The company currently has a dividend payout ratio of 66% and a dividend yield of 2.57% based on the closing share price of $47.54 on Jan 18. Over the past two decades, Fastenal has been paying out annual dividends. Also, it paid out special one-time dividends in December 2008, December 2012 and December 2020.
With the recent move, FAST is maintaining its commitment to increase stockholders’ returns regularly. The move reflects the company’s sound and stable financial position, and commitment to rewarding shareholders amid industry-wide challenges.
Will This Sustain?
Fastenal has been paying cash dividends since 1991. It has been consistently sharing its cash flows with shareholders and maintaining a strong financial position. It ended third-quarter 2022 with cash and cash equivalents of $231.5 million versus $236.2 million at 2021-end. The company has sufficient funds to meet the short-term obligation of $150.3 million. Operating lease liabilities, net of the current portion, at September-end were $161.2 million, slightly up from $156 million at 2021-end. Nonetheless, it has no significant debt maturity in recent years.
Image Source: Zacks Investment Research
Additionally, cash provided by operating activities was $257.9 million for third-quarter 2022 versus $167.4 million a year ago. This reflects significantly improved levels of cash flow for the quarter. The company’s financial strength, access to low-cost capital and ability to generate cash flow provide confidence to its stakeholders.
Investors always prefer a return-generating stock. A high-dividend-yielding one is much coveted. It goes without saying that stockholders are always on the lookout for companies with a record of consistent and incremental dividend payments.
Although shares of the company underperformed the industry in the past year, earnings estimates for 2023 moved up to $1.92 per share from $1.90 in the past 30 days. The trend is likely to continue, given its solid cost-control measures, combative investment to increase Onsite locations and focus on e-commerce business. The company is benefiting from higher demand for industrial capital goods and commodities, which are offsetting softer markets tied to consumer goods and relatively lower growth in construction.
Zacks Rank & Key Picks
Currently, Fastenal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Darden Restaurants, Inc. (DRI - Free Report) , McDonald's Corporation (MCD - Free Report) and Yum! Brands, Inc. (YUM - Free Report) .
Darden carries a Zacks Rank #2 (Buy). DRI has a long-term earnings growth rate of 9.8%.
The Zacks Consensus Estimate for Darden’s 2023 sales and earnings per share (EPS) suggests growth of 7.9% and 5.5%, respectively, from the year-ago period’s reported levels.
McDonald's carries a Zacks Rank #2. MCD has a long-term earnings growth rate of 8.2%.
The Zacks Consensus Estimate for McDonald's 2023 sales and EPS suggests growth of 3.2% and 5.3%, respectively, from the year-ago period’s reported levels.
Yum! Brands currently carries a Zacks Rank #2. YUM has a long-term earnings growth rate of 11.8%.
The Zacks Consensus Estimate for Yum! Brands’ 2023 sales and EPS suggests growth of 6.2% and 15.5%, respectively, from the year-ago period’s reported levels.