In a bid to impress investors, RPM International Inc. (RPM - Free Report) declared a 9.4% hike in its quarterly cash dividend to 35 cents per share. The dividend will be paid on Oct 31, 2018, to shareholders on record as of Oct 16, 2018.
The company has been increasing dividend for quite some time now. In fact, the latest increase marks RPM International’s 45th consecutive year of hike in dividend, reflecting its strong cash position and solid balance sheet.
Notably, the company has returned approximately $2.4 billion to its stockholders since the inception of its dividend payout policy.
Efforts to Enhance Shareholders’ Value
RPM International is highly focused on driving its shareholders’ value through regular dividend hikes and share repurchase program. On Jan 8, 2008, the company announced the authorization of a stock repurchase program. As part of the aforesaid program, on Oct 1, 2018, it repurchased 689,640 shares for approximately $46.4 million or an average price of $67.26 per share.
RPM International’s management is streamlining its portfolio through its restructuring plan, for faster growing and better executing its Consumer segment’s performance. Additionally, its restructuring plan, concerning the Industrial segment, will simplify processes, reduce headcount, eliminate underperforming businesses, and deliver better results to customers, employees and its shareholders.
Moreover, acquisition is an important part of RPM’s growth strategy. In fiscal 2018, acquisitions added 3% to total net sales. On Sep 12, it acquired Nudura Corporation, a leading manufacturer and distributor of insulated concrete forms (“ICF”) in North America. The deal is an excellent strategic fit for RPM’s Dryvit business, providing it a key competitive advantage.
For fiscal 2019, the company expects its Consumer and Industrial segment net sales to increase in the mid-single-digit range. Whereas, it anticipates sales growth in the Specialty segment to be in the low single-digit range. Consequently, its cost-saving efforts are expected to improve operating margin significantly.
Meanwhile, shares of RPM International have outperformed its industry in the past six months. Its shares have gained 25.6% compared with its industry’s rally of 15.3% in the said period.
Zacks Rank & Stocks to Consider
Currently, RPM International carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Construction sector are Armstrong Flooring, Inc. (AFI - Free Report) , Continental Building Products, Inc. (CBPX - Free Report) and PGT Innovations, Inc. (PGTI - Free Report) . While Armstrong Flooring and PGT Innovations sport a Zacks Rank #1 (Strong Buy), Continental Building carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Armstrong Flooring, PGT Innovations and Continental Building’s 2018 earnings are expected to grow 104.8%, 78.7% and 52.6%, respectively.
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