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The Zacks Analyst Blog Highlights: Heidrick & Struggles International, D.R. Horton, M.D.C., EnPro Industries and Steel Dynamics
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For Immediate Release
Chicago, IL – April 29, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Heidrick & Struggles International Inc. (HSII - Free Report) , D.R. Horton, Inc. (DHI - Free Report) , M.D.C. Holdings Inc. , EnPro Industries (NPO - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Fearing Cuts to Current Income? These 5 Dividend Stocks Look Safe
Coronavirus-induced economic mayhem has suddenly ruined companies’ favorite ways of shareholder value maximization. There have been rampant cuts in share repurchases, one of the popular tools to have charged up Wall Street time and again for all these years.
Even promised dividends have not been safe lately. Liquidity crisis at corporations calls for prudent cash management and has led to such a step.
Energy companies are known for paying out high dividends. In the ongoing oil market rout, maintaining huge dividend payouts is a tall order. Apart from energy companies, the REIT and retail sectors have also taken the dividend cut route.
March 2020 Dividend Announcements Turn Negative, April Treads Same Path
Since share repurchases are seen as more discretionary than dividends, the first blow was dealt there. But dividends that are safer in nature are also not seeing a smooth stretch. The winning trend of huge dividend payments started to falter from March itself.
Per S&P Dow Jones Indices, March 2020 dividend announcements were negative. There were 13 cuts, with 10 being suspensions, making for a total forward impact of $13.9 billion. More cuts are likely. For U.S. common issues, the net-indicated dividend change was negative $5.5 billion. Last time it turned negative was in second-quarter 2009 (negative $4.9 billion), when the previous record low was also seen (negative $43.8 billion).
As of Apr 24, nine S&P 500 companies had adjourned their April dividends and about half a dozen other companies announced cuts. Those with a still-existent dividend policy may record a sturdy yield. But one should not fall for the trap unless one is checking the company and sector’s fundamentals in the incumbent stressful business scenario.
How to Pick the Hidden Gems?
In order to pick some safer options, below we highlight a few dividend stocks with the below-mentioned criteria.
These stocks have five-year historical dividend growth at least 1%, long-term growth forecast more than 5%, 5-year historical EPS growth at least 20%, 5-year historical revenue growth at least 5%, debt-equity ratio less than one, and a cash ratio greater than 1x.
Note that upbeat long-term growth prospects ensure dividend safety of a stock. Moreover, lower debt and greater liquidity are added strengths that should help companies sail through this tough economic time and maintain dividend payouts.
Let’s take a look at the picks. These companies have a Zacks Rank #3 (Hold) and offer benchmark-beating yields.
Heidrick & Struggles International Inc.
It serves the executive talent and leadership needs of the world's top organizations.
5-Year Historical Dividend Growth: 3.28%
Long-term Growth Consensus Estimate: 10.00%
5-Year Historical EPS Growth: 38.41%
5-Year Historical Sales Growth: 8.88%
Debt-Equity Ratio: 0.26x
Cash Ratio: 1.10x
Dividend Yield: 2.55%
D.R. Horton, Inc.
It is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.
5-Year Historical Dividend Growth: 28.73%
Long-term Growth Consensus Estimate: 9.98%
5-Year Historical EPS Growth: 24.04%
5-Year Historical Sales Growth: 14.38%
Debt-Equity Ratio: 0.36x
Cash Ratio: 1.35x
Dividend Yield: 1.71%
M.D.C. Holdings Inc.
It engages in homebuilding and financial service businesses in the United States.
5-Year Historical Dividend Growth: 11.06%
Long-term Growth Consensus Estimate: 6.64%
5-Year Historical EPS Growth: 35.58%
5-Year Historical Sales Growth: 14.63%
Debt-Equity Ratio: 0.64x
Cash Ratio: 1.99x
Dividend Yield: 5.39%
EnPro Industries
It is a diversified manufacturer of proprietary engineered products used in critical applications.
5-Year Historical Dividend Growth: 5.93%
Long-term Growth Consensus Estimate: 15.20%
5-Year Historical EPS Growth: 25.04%
5-Year Historical Sales Growth: 6.21%
Debt-Equity Ratio: 0.70x
Cash Ratio: 1.28x
Dividend Yield: 2.54%
Steel Dynamics, Inc.
It is among the leading steel producers and metal recyclers in the United States.
5-Year Historical Dividend Growth: 15.64%
Long-term Growth Consensus Estimate: 12.00%
5-Year Historical EPS Growth: 45.55%
5-Year Historical Sales Growth: 9.60%
Debt-Equity Ratio: 0.67x
Cash Ratio: 1.71x
Dividend Yield: 4.25%
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Heidrick & Struggles International, D.R. Horton, M.D.C., EnPro Industries and Steel Dynamics
For Immediate Release
Chicago, IL – April 29, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Heidrick & Struggles International Inc. (HSII - Free Report) , D.R. Horton, Inc. (DHI - Free Report) , M.D.C. Holdings Inc. , EnPro Industries (NPO - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Fearing Cuts to Current Income? These 5 Dividend Stocks Look Safe
Coronavirus-induced economic mayhem has suddenly ruined companies’ favorite ways of shareholder value maximization. There have been rampant cuts in share repurchases, one of the popular tools to have charged up Wall Street time and again for all these years.
Even promised dividends have not been safe lately. Liquidity crisis at corporations calls for prudent cash management and has led to such a step.
Energy companies are known for paying out high dividends. In the ongoing oil market rout, maintaining huge dividend payouts is a tall order. Apart from energy companies, the REIT and retail sectors have also taken the dividend cut route.
March 2020 Dividend Announcements Turn Negative, April Treads Same Path
Since share repurchases are seen as more discretionary than dividends, the first blow was dealt there. But dividends that are safer in nature are also not seeing a smooth stretch. The winning trend of huge dividend payments started to falter from March itself.
Per S&P Dow Jones Indices, March 2020 dividend announcements were negative. There were 13 cuts, with 10 being suspensions, making for a total forward impact of $13.9 billion. More cuts are likely. For U.S. common issues, the net-indicated dividend change was negative $5.5 billion. Last time it turned negative was in second-quarter 2009 (negative $4.9 billion), when the previous record low was also seen (negative $43.8 billion).
As of Apr 24, nine S&P 500 companies had adjourned their April dividends and about half a dozen other companies announced cuts. Those with a still-existent dividend policy may record a sturdy yield. But one should not fall for the trap unless one is checking the company and sector’s fundamentals in the incumbent stressful business scenario.
How to Pick the Hidden Gems?
In order to pick some safer options, below we highlight a few dividend stocks with the below-mentioned criteria.
These stocks have five-year historical dividend growth at least 1%, long-term growth forecast more than 5%, 5-year historical EPS growth at least 20%, 5-year historical revenue growth at least 5%, debt-equity ratio less than one, and a cash ratio greater than 1x.
Note that upbeat long-term growth prospects ensure dividend safety of a stock. Moreover, lower debt and greater liquidity are added strengths that should help companies sail through this tough economic time and maintain dividend payouts.
Let’s take a look at the picks. These companies have a Zacks Rank #3 (Hold) and offer benchmark-beating yields.
Heidrick & Struggles International Inc.
It serves the executive talent and leadership needs of the world's top organizations.
5-Year Historical Dividend Growth: 3.28%
Long-term Growth Consensus Estimate: 10.00%
5-Year Historical EPS Growth: 38.41%
5-Year Historical Sales Growth: 8.88%
Debt-Equity Ratio: 0.26x
Cash Ratio: 1.10x
Dividend Yield: 2.55%
D.R. Horton, Inc.
It is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.
5-Year Historical Dividend Growth: 28.73%
Long-term Growth Consensus Estimate: 9.98%
5-Year Historical EPS Growth: 24.04%
5-Year Historical Sales Growth: 14.38%
Debt-Equity Ratio: 0.36x
Cash Ratio: 1.35x
Dividend Yield: 1.71%
M.D.C. Holdings Inc.
It engages in homebuilding and financial service businesses in the United States.
5-Year Historical Dividend Growth: 11.06%
Long-term Growth Consensus Estimate: 6.64%
5-Year Historical EPS Growth: 35.58%
5-Year Historical Sales Growth: 14.63%
Debt-Equity Ratio: 0.64x
Cash Ratio: 1.99x
Dividend Yield: 5.39%
EnPro Industries
It is a diversified manufacturer of proprietary engineered products used in critical applications.
5-Year Historical Dividend Growth: 5.93%
Long-term Growth Consensus Estimate: 15.20%
5-Year Historical EPS Growth: 25.04%
5-Year Historical Sales Growth: 6.21%
Debt-Equity Ratio: 0.70x
Cash Ratio: 1.28x
Dividend Yield: 2.54%
Steel Dynamics, Inc.
It is among the leading steel producers and metal recyclers in the United States.
5-Year Historical Dividend Growth: 15.64%
Long-term Growth Consensus Estimate: 12.00%
5-Year Historical EPS Growth: 45.55%
5-Year Historical Sales Growth: 9.60%
Debt-Equity Ratio: 0.67x
Cash Ratio: 1.71x
Dividend Yield: 4.25%
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.