Patterson Companies Inc.
), a Minn.-based distributor of dental, veterinarian and
rehabilitation medical supplies, recently announced a dividend
hike as well as a share buyback program to leverage investor
Patterson has increased its quarterly dividend by 14% to 16
cents a share from 14 cents. This lifted the annual dividend to
64 cents per share from the current payout of 56 cents and
equates a dividend yield of roughly 1.7%.
The revised quarterly dividend is payable on Apr 30, 2013, to
shareholders of record as on Apr 12, 2013. The company's previous
dividend increase was in Mar 2012, when it raised the quarterly
payout by roughly 17% to 14 cents a share from 12 cents.
Management also announced a share buyback program of $25
million to leverage its earnings power. This plan replaced
Patterson's earlier share repurchase authorizations. At the end
of the third quarter of fiscal 2013, the company had about 7
million shares available for repurchase under its 2016 share
The shares will be repurchased through open market
transactions till Mar 19, 2018 subject to certain terms and
conditions. Following the repurchase, the shares will be retired
and will be considered as authorized but un-issued.
Patterson has strong liquidity to support the dividend
increase as well as the share repurchase plan. The company ended
the third quarter of fiscal 2013 with cash and cash equivalents
of $472.4 million.
Patterson provides a wide range of consumables, equipment and
software, and value-added services to its customers. Patterson
Dental is the company's largest business segment and one of the
two largest distributors of dental products in North America.
Moreover, the alliance with
Sirona Dental Systems
) further bolsters Patterson Dental's leading position in the
North American dental distribution business. We also believe that
its Veterinary business can capture a considerable market size,
as the demand for veterinary care is on the rise in the U.S.
The company carries a Zacks Rank #3 (Hold). Some of the
Medical/Dental Supplies companies worth a look are
Medical Action Industries
The Cooper Companies
). The former carries a Zacks Rank #1 (Strong Buy), while the
latter carries a Zacks Rank #2 (Buy).
COOPER COS (COO): Free Stock Analysis Report
MEDICAL ACTION (MDCI): Free Stock Analysis
PATTERSON COS (PDCO): Free Stock Analysis
SIRONA DENTAL (SIRO): Free Stock Analysis
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