Briggs & Stratton - Growth & Income

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Shares of Briggs & Stratton Corporation ( BGG ) touched a new 52-week high on December 19, and have registered a 37.5% return year to date. The Zacks #2 Rank (Buy) industrial goods maker recently announced a 9% hike in its quarterly dividend rate and has a solid 5-year average dividend yield of 3.5%.

Driving Catalysts

In August, the company revised its quarterly dividend to 12 cents from 11 cents, representing an increase of 9%. The stock currently yields a solid 2.3% based on an annual dividend rate of 48 cents per share.


Apart from dividends, the company recently acquired Companhia Caetano Branco, a leading brand in the Brazilian light power equipment market for $57 million in cash. Also, the company opened a new wholly owned subsidiary in Kuala Lumpur, Malaysia. The new entity will enable the company to tap the potential market in the region.

Earnings Estimates Moving Higher

Considering the last 60 days, the Zacks Consensus Estimate for fiscal 2013 (ending June 2013) has advanced 4.5% to $1.38. The Zacks Consensus Estimate for fiscal year 2014 gained 0.4% to $1.66. These estimates represent year-over-year growth of 20.2% for 2013 and 19.8% for 2014.

Valuation

Briggs & Stratton Corporation is currently trading at a forward P/E of 15.4x, compared with 12.1x for the peer group. The company's ROE stands at 7.4%.

In the past twelve months, the company's stock climbed to $21.00 per share from $16.00. Moreover, considering the rising Zacks Consensus Estimate, the stock's outlook seems bright in the years ahead.

The solid dividend yield and expansion through meaningful acquisitions bode well for the stock and make it an attractive investment option.

Briggs & Stratton Corporation is one of the leading manufacturers and sellers of cooled gasoline engines, designed especially for outdoor power equipment. Currently, the company has a market capitalization of $1.0 billion.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks

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As of 12/19/2014, 11:41 AM


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