) recently announced an 11% (3.5 cents) hike in its quarterly
dividend to 35 cents from the prior payout of 31.5 cents. This
marks the 57th consecutive year of dividend hike by Dover and
places the company in the fourth position with respect to highest
number of consecutive annual dividend increases among all listed
companies, according to Mergent's Dividend Achievers.
The increased dividend will be paid on September 15, 2012, to
stockholders of record as of August 31, 2011. Previously, Dover had
increased its quarterly dividend by 14.5% to 27.5 cents in August
The company's dividend yield of 2.61% is higher than the industry
yield of 2.09%. Dover's 5-year dividend growth rate of 10.69 is
also way ahead of the industry average of 4.80. However, its payout
ratio of 27.58% is less than the industry average of 44.33%.
With net margin of 10.07% almost close to industry average of
10.61%, Dover can further improve its payout ratio. Dover also
outscores its competitors like
Cooper Industries plc
) in terms of dividend yield, dividend growth and payout ratio.
COOPER INDS PLC (CBE): Free Stock Analysis
DOVER CORP (DOV): Free Stock Analysis Report
INGERSOLL RAND (IR): Free Stock Analysis Report
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Dover recently reported second-quarter 2012 earnings of $1.15 per
share, ahead of the Zacks Consensus Estimate of $1.14. Results
inched up 1% from the prior-year quarter earnings of $1.14 per
share. Total revenue was $2.157 billion, improving 8% year over
year but missing the Zacks Consensus Estimate of $2.186 billion.
For fiscal 2012, Dover expects revenue growth in the range of
8%-10%, down from the previous guidance of 10%-14%. Organic revenue
growth will contribute 3%-5% while acquisitions will add 5% to the
revenue growth. It expects earnings to lie in the band of
$4.70-$4.85. The Zacks Consensus Estimate for EPS is at $4.73 per
share and for revenue at $8.6 billion, an 8.3% annual growth.
Dover has strong liquidity to support the dividend increase. The
company ended the second quarter with cash and cash equivalents of
$786 million and generated $412 million in cash from operations in
the first half of fiscal 2012.
Dover's expansion has been mainly driven by acquisitions and its
acquisition pipeline is ever active. Production Control Services,
Inc. will complement the Norris Production Solutions, an operating
unit within Dover's Energy segment. The acquisition will help Dover
to pursue its strategy of becoming the market leader in the field
of artificial lift. Further, it will be able to foray into the
artificial lift market with a wider and diversified range of
Dover has access to the volatile semiconductor and electronics
end-markets through its Printing and Identification segment. With
regards to development, we do not expect anything noteworthy in the
semiconductor sector in 2012 and thus remain cautious regarding the
outlook for Printing and Identification.
We maintain our long-term Neutral recommendation on Dover. Dover
retains a short-term Zacks #3 Rank (Hold).
New York-based Dover is an industrial conglomerate producing a wide
range of specialized industrial products and manufacturing