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Agilent (A) to Reward Shareholders with 14.8% Dividend Hike

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Agilent Technologies Inc. (A - Free Report) , a broad-based OEM of test and measurement equipment, recently raised the quarterly dividend to 13.2 cents per share from 11.5 cents, representing approximately 14.8% hike.

The new dividend will be paid on Jan 25, 2017 to shareholders of record as of Jan 3.

The strength of Agilent’s business model is reflected in its strong cash generation capabilities and commitment to return value to shareholders. We believe that consistent increase in dividends will inspire investors’ loyalty.

Agilent’s strong balance sheet and cash flows provide the financial flexibility required for dividend hikes, share repurchases and strategic acquisitions. During full fiscal 2016, the company distributed $150 million in cash dividend and repurchased $434 million of shares. At the end of the fourth quarter, cash and short-term investments balance was $2.29 billion compared with $2.20 billion in the prior quarter. Also, the company generated $234 million in operating cash flow.

We are encouraged by the company’s strong cash position and ability to service its long-term debts.

Agilent delivered strong fourth-quarter results with both the bottom and top line surpassing the Zacks Consensus Estimate. The company’s decision to divest or wind up underperforming businesses has enhanced focus on the new Agilent, while enabling management to expand the solid recurring revenue base and diversify geographic and industrial operations to achieve growth. Also, the company’s focus on aligning investment toward more attractive growth avenues and innovative product launches is a positive.

However, uncertain macro conditions, particularly in the U.S. and Europe remain as major concerns. Nevertheless, the company seems prepared to counter the impact of foreign currency headwinds on revenues and profits.

Currently, Agilent has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Cognex Corporation (CGNX - Free Report) , Itron, Inc. (ITRI - Free Report) and Teradyne Inc.  (TER - Free Report) with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.

Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the trailing four quarters.

Teradyne Inc. delivered a positive earnings surprise of 19.26% in the trailing four quarters.

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