Fortune Brands Home & Security, Inc. announced that on Dec 8 its board of directors approved an 11% increase in the quarterly dividend rate and authorized a $250 million share buyback program.
Such disbursements reflect the company’s strong cash position and its commitment toward rewarding its shareholders handsomely.
In the last three months, Fortune Brands’ shares have yielded 5.2% return, outperforming 2.7% decline of the industry.
Details on the Twin Rewards
As revealed, the quarterly dividend rate was increased from 18 cents to 20 cents, marking the fifth consecutive year of double digit increase. The annualized rate now is 80 cents versus the earlier 72 cents per share. The company will pay the revised quarterly dividend on Mar 14, 2018 to shareholders on record as of Feb 23, 2018.
Also, Fortune Brands noted that the authorized $250 million common share buyback program is valid for the next two years. It can repurchase shares in the open market or through privately negotiated transactions. This program along with $300 million left of the earlier program — authorized in March and expires on Feb 28, 2019 — gives the company a chance of repurchase up to $550 million of its common shares.
Our Take
We believe that the rise in Fortune Brands’ profitability and a strong cash position will enable it to return higher value to its shareholders in the years ahead. Notably, the company’s net income jumped 10% year over year in the first nine months of 2017. Dividend paid during the period totaled $82.7 million. Net cash generated from operating activities in the period was $352.6 million while cash and cash equivalents exiting the period was $277.1 million.
In the last four years (2013-2016), the company’s annual dividend rate has increased from 42 cents to 66 cents per share.
Over the last 30 days, the Zacks Consensus for the stock has been pegged at $3.07 for 2017 and $3.41 for 2018. These estimates reflect year-over-year growth of 11.7% for 2017 and 11.1% for 2018.
Fortune Brands Home & Security, Inc. Price and Consensus
Fortune Brands Home & Security, Inc. Price and Consensus | Fortune Brands Home & Security, Inc. Quote
Zacks Rank & Stocks to Consider
With a market capitalization of $10.3 billion, Fortune Brands carries a Zacks Rank #3 (Hold). Stocks worth considering in the Zacks Industrial Products sector include Net 1 UEPS Technologies, Inc. , Sun Hydraulics Corporation and Altra Industrial Motion Corporation . While Net 1 UEPS and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Net 1 UEPS’ earnings estimates for fiscal 2018 and fiscal 2019 remained stable over the last 60 days. Also, the company delivered an average positive earnings surprise of 5.34% in the last four quarters.
Sun Hydraulics delivered an average positive earnings surprise of 9.58% in the trailing four quarters. Also, bottom-line expectations for 2017 and 2018 improved over the past 60 days.
Altra Industrial Motion’s financial performance was impressive, with an average positive earnings surprise of 17.30% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Fortune Brands Ups Dividend by 11%, to Buyback $250M Shares
Fortune Brands Home & Security, Inc. announced that on Dec 8 its board of directors approved an 11% increase in the quarterly dividend rate and authorized a $250 million share buyback program.
Such disbursements reflect the company’s strong cash position and its commitment toward rewarding its shareholders handsomely.
In the last three months, Fortune Brands’ shares have yielded 5.2% return, outperforming 2.7% decline of the industry.
Details on the Twin Rewards
As revealed, the quarterly dividend rate was increased from 18 cents to 20 cents, marking the fifth consecutive year of double digit increase. The annualized rate now is 80 cents versus the earlier 72 cents per share. The company will pay the revised quarterly dividend on Mar 14, 2018 to shareholders on record as of Feb 23, 2018.
Also, Fortune Brands noted that the authorized $250 million common share buyback program is valid for the next two years. It can repurchase shares in the open market or through privately negotiated transactions. This program along with $300 million left of the earlier program — authorized in March and expires on Feb 28, 2019 — gives the company a chance of repurchase up to $550 million of its common shares.
Our Take
We believe that the rise in Fortune Brands’ profitability and a strong cash position will enable it to return higher value to its shareholders in the years ahead. Notably, the company’s net income jumped 10% year over year in the first nine months of 2017. Dividend paid during the period totaled $82.7 million. Net cash generated from operating activities in the period was $352.6 million while cash and cash equivalents exiting the period was $277.1 million.
In the last four years (2013-2016), the company’s annual dividend rate has increased from 42 cents to 66 cents per share.
Over the last 30 days, the Zacks Consensus for the stock has been pegged at $3.07 for 2017 and $3.41 for 2018. These estimates reflect year-over-year growth of 11.7% for 2017 and 11.1% for 2018.
Fortune Brands Home & Security, Inc. Price and Consensus
Fortune Brands Home & Security, Inc. Price and Consensus | Fortune Brands Home & Security, Inc. Quote
Zacks Rank & Stocks to Consider
With a market capitalization of $10.3 billion, Fortune Brands carries a Zacks Rank #3 (Hold). Stocks worth considering in the Zacks Industrial Products sector include Net 1 UEPS Technologies, Inc. , Sun Hydraulics Corporation and Altra Industrial Motion Corporation . While Net 1 UEPS and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Net 1 UEPS’ earnings estimates for fiscal 2018 and fiscal 2019 remained stable over the last 60 days. Also, the company delivered an average positive earnings surprise of 5.34% in the last four quarters.
Sun Hydraulics delivered an average positive earnings surprise of 9.58% in the trailing four quarters. Also, bottom-line expectations for 2017 and 2018 improved over the past 60 days.
Altra Industrial Motion’s financial performance was impressive, with an average positive earnings surprise of 17.30% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>