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Owens Corning Rewards Investors With 15% Dividend Hike: What to Know?
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Owens Corning (OC - Free Report) has been following an incremental dividend policy since 2014. In sync with this, it recently boosted its investors’ sentiments again with a quarterly dividend hike.
The board of directors approved a quarterly dividend payout of 69 cents per share ($2.76 per share annually), which is up 15% from the previous dividend payout of 60 cents per share ($2.40 per share annually). The amount will be paid out on Jan. 17, 2025, to shareholders of record as of Jan. 6. Based on the closing price of $201.91 per share on Dec. 6, the stock has a dividend yield of 1.4%.
Owens Corning’s balanced capital allocation strategy, along with strong free cash flow and a stable balance sheet, has enabled it to undertake the dividend hike decision.
Owens Corning abides by its balanced capital allocation strategy, which states returning at least 50% of the free cash flow generated to its investors over time along with using the other portion to boost its market position. It also aims to maintain an investment-grade balance sheet to support its liquidity position. The balanced capital allocation is further supported by strong top-line performance. With the continuation of this leverage, OC will be able to take care of shareholder value.
Regarding the capital allocation strategy of OC, it generated $766 million of free cash flow in the first nine months of 2024, up 21% from $631 million in the prior year. A year-over-year increase of 10% in net sales during the same time frame aided the uptrend to a great extent. Furthermore, during the nine months, the company returned $486 million to its shareholders through share repurchases and dividends. As of Sept. 30, 2024, it had 6.9 million shares available for repurchase under the current authorization (the Repurchase Authorization permits the repurchase of up to 10 million shares of its outstanding common stock).
Revenues, which backed Owens Corning’s decision to hike its quarterly dividend, were up year over year during the first nine months of 2024 to $8.14 billion from $7.37 billion reported a year ago. The uptrend was driven by increased contributions from its Doors segment attributable to the Masonite acquisition, alongside higher selling prices and a favorable product mix. Moreover, product innovation, inorganic initiatives and focus on footprint expansion are additional benefits for the company.
OC Stock Price Performance
Shares of this provider of building materials systems and composite solutions have gained 28% in the past three months, outperforming the Zacks Building Products - Miscellaneous industry’s 13.9% growth. The company’s performance is most likely backed by its strategic focus on high-margin products, improvement in operational efficiencies and divestment of low-margin and capital-intensive businesses. Furthermore, the balanced capital allocation strategy bodes well, as its incremental trajectory has been boosting investors’ sentiments for a long time now.
Image Source: Zacks Investment Research
The company’s trailing 12-month return on equity (ROE) is indicative of its growth potential and focus on maintaining shareholder value. Its ROE of 25.8% compares favorably with the industry’s 15.2%, indicating more efficiency in using shareholders’ funds than peers.
Furthermore, the Zacks Consensus Estimate for Owens Corning’s 2024 earnings per share (EPS) has increased over the past 30 days to $15.46 from $15.40, indicating 7.2% year-over-year growth. Although the company’s 2025 EPS estimates have declined over the same time frame, the estimated figure indicates 1.9% growth from a year ago.
OC’s Zacks Rank & Key Picks
Owens Corning currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Construction sector.
It has a trailing four-quarter earnings surprise of 21.5%, on average. Shares of STRL have surged 70.4% in the past six months. The Zacks Consensus Estimate for STRL’s 2025 sales and EPS implies an increase of 7.3% and 8.1%, respectively, from the prior-year levels.
Louisiana-Pacific Corporation (LPX - Free Report) currently sports a Zacks Rank of 1. LPX delivered a trailing four-quarter earnings surprise of 30.7%, on average. The stock has gained 32% in the past six months.
The consensus estimate for LPX’s 2025 sales indicates an increase of 4.3% while the estimate for EPS implies a decline of 7.3% from a year ago.
MasTec, Inc. (MTZ - Free Report) presently sports a Zacks Rank of 1. MTZ delivered a trailing four-quarter earnings surprise of 40.2%, on average. The stock has gained 30.2% in the past six months.
The Zacks Consensus Estimate for MTZ’s 2025 sales and EPS indicates an increase of 8.6% and 45.5%, respectively, from a year ago.
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Owens Corning Rewards Investors With 15% Dividend Hike: What to Know?
Owens Corning (OC - Free Report) has been following an incremental dividend policy since 2014. In sync with this, it recently boosted its investors’ sentiments again with a quarterly dividend hike.
The board of directors approved a quarterly dividend payout of 69 cents per share ($2.76 per share annually), which is up 15% from the previous dividend payout of 60 cents per share ($2.40 per share annually). The amount will be paid out on Jan. 17, 2025, to shareholders of record as of Jan. 6. Based on the closing price of $201.91 per share on Dec. 6, the stock has a dividend yield of 1.4%.
Owens Corning’s balanced capital allocation strategy, along with strong free cash flow and a stable balance sheet, has enabled it to undertake the dividend hike decision.
Here’s What’s Aiding Owens Corning’s Dividend Policy
Owens Corning abides by its balanced capital allocation strategy, which states returning at least 50% of the free cash flow generated to its investors over time along with using the other portion to boost its market position. It also aims to maintain an investment-grade balance sheet to support its liquidity position. The balanced capital allocation is further supported by strong top-line performance. With the continuation of this leverage, OC will be able to take care of shareholder value.
Regarding the capital allocation strategy of OC, it generated $766 million of free cash flow in the first nine months of 2024, up 21% from $631 million in the prior year. A year-over-year increase of 10% in net sales during the same time frame aided the uptrend to a great extent. Furthermore, during the nine months, the company returned $486 million to its shareholders through share repurchases and dividends. As of Sept. 30, 2024, it had 6.9 million shares available for repurchase under the current authorization (the Repurchase Authorization permits the repurchase of up to 10 million shares of its outstanding common stock).
Revenues, which backed Owens Corning’s decision to hike its quarterly dividend, were up year over year during the first nine months of 2024 to $8.14 billion from $7.37 billion reported a year ago. The uptrend was driven by increased contributions from its Doors segment attributable to the Masonite acquisition, alongside higher selling prices and a favorable product mix. Moreover, product innovation, inorganic initiatives and focus on footprint expansion are additional benefits for the company.
OC Stock Price Performance
Shares of this provider of building materials systems and composite solutions have gained 28% in the past three months, outperforming the Zacks Building Products - Miscellaneous industry’s 13.9% growth. The company’s performance is most likely backed by its strategic focus on high-margin products, improvement in operational efficiencies and divestment of low-margin and capital-intensive businesses. Furthermore, the balanced capital allocation strategy bodes well, as its incremental trajectory has been boosting investors’ sentiments for a long time now.
Image Source: Zacks Investment Research
The company’s trailing 12-month return on equity (ROE) is indicative of its growth potential and focus on maintaining shareholder value. Its ROE of 25.8% compares favorably with the industry’s 15.2%, indicating more efficiency in using shareholders’ funds than peers.
Furthermore, the Zacks Consensus Estimate for Owens Corning’s 2024 earnings per share (EPS) has increased over the past 30 days to $15.46 from $15.40, indicating 7.2% year-over-year growth. Although the company’s 2025 EPS estimates have declined over the same time frame, the estimated figure indicates 1.9% growth from a year ago.
OC’s Zacks Rank & Key Picks
Owens Corning currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Construction sector.
Sterling Infrastructure, Inc. (STRL - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter earnings surprise of 21.5%, on average. Shares of STRL have surged 70.4% in the past six months. The Zacks Consensus Estimate for STRL’s 2025 sales and EPS implies an increase of 7.3% and 8.1%, respectively, from the prior-year levels.
Louisiana-Pacific Corporation (LPX - Free Report) currently sports a Zacks Rank of 1. LPX delivered a trailing four-quarter earnings surprise of 30.7%, on average. The stock has gained 32% in the past six months.
The consensus estimate for LPX’s 2025 sales indicates an increase of 4.3% while the estimate for EPS implies a decline of 7.3% from a year ago.
MasTec, Inc. (MTZ - Free Report) presently sports a Zacks Rank of 1. MTZ delivered a trailing four-quarter earnings surprise of 40.2%, on average. The stock has gained 30.2% in the past six months.
The Zacks Consensus Estimate for MTZ’s 2025 sales and EPS indicates an increase of 8.6% and 45.5%, respectively, from a year ago.