Raven Industries Inc. (RAVN - Analyst Report) announced that its Board of Directors has approved a two-for-one stock split in the form of a stock dividend. The decision was taken on the back of strong operating results and stock performance.
On July 25, 2012, a shareholder owning one share of Raven stock as of the close of business on July 10, 2012, will receive two shares of Raven common stock. The company had last announced a two-for-one stock split in October 2004.
In addition, the company announced that its board of directors has approved a regular cash dividend of 21 cents per pre-split share. This dividend will be paid on July 25, 2012 to shareholders of record on July 10, 2012. Earlier, in March this year, Raven had hiked its dividend by 17% to the current payout of 21 cents per share, the 26th consecutive enhancement in its dividend payment.
The stock-split announcement comes a week after Raven reported its first quarter 2013 results reflecting strong performance in Applied Technology and Engineered Films segments. Raven delivered earnings of $1.04 per share, a 21% increase from the 86 cents per share earned in the year-ago quarter. Sales increased 16% year over year to $117.9 million. Both earnings per share and sales outperformed the respective Zacks Consensus Estimates.
Raven Industries ended the quarter with cash and cash equivalents, including short-term investments, of $43.5 million, up from the $25.8 million at the end of January 31, 2012 and $42.6 million as of April 30, 2011. Cash flow from operating activities during the quarter improved to $28.2 million from $11.0 million in the year-ago quarter.
The stock split will broaden Raven’s shareholder base, increase market liquidity and enhance shareholder value. Raven has ample scope to fund future growth and increase dividends with the support of a debt-free balance sheet and solid cash flow.
Raven will benefit from the current strength in the agriculture market. However, quarter-to-quarter variability of aerostat orders will persist leading to significant fluctuations in the Aerostar division. The company continues to invest strategically in research and development, boosting financial results.
The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on stock over the near term.
South Dakota-based Raven Industries Inc. is an industrial manufacturer providing a variety of products for the agricultural, industrial, construction and military/aerospace markets. The company operates through four business segments: Engineered Films, Electronic Systems, Applied Technology and Aerostar. Graco Inc. (GGG - Snapshot Report) and Spartech Corp. are Raven’s peers.