The Board of
) raised its annual dividend by 25% to $1.20 per share from 96
cents in 2013. This is the 38th consecutive hike in the company's
dividend. This represents a payout ratio of 35.6% and a dividend
yield of roughly 1.6%.
Payment of the dividend will be made in four equal quarterly
installments of 30 cents per share in each of the third and fourth
quarters of 2014 and the first and second quarters of 2015, which
is 5 cents per share more than the previous quarter dividend.
The record dates for dividend will be determined by Pentair`s board
of directors. The dividends will be paid out of Pentair`s capital
contribution reserve. The company paid $194.2 million dividends in
2013 compared with $112.4 million in 2012.
In addition to dividend hike, Pentair also declared change in the
place of incorporation from Switzerland to Ireland. The decision,
however, is yet to be finalized during June 1st week, subject to
certain governmental approvals.
Pentair reported improved results in the first-quarter of 2014.
Adjusted earnings increased 26% year over year to 73 cents per
share, which was at the upper end of the company's guidance range
of 70 to 73 cents per share. The results were in line with the
Zacks Consensus Estimate.
During the quarter, Pentair completed $1.2 billion share repurchase
authorization with just under $900 million remaining on its current
$1 billion authorization. In addition, the company ended the
quarter with Return on invested capital (ROIC) of 10%.
Pentair projects its adjusted earnings per share (EPS) guidance in
the range of $3.85-$4.00 for full-year 2014, which represents an
increase of around 22% over 2013 adjusted EPS. The company expects
sales to be around $7.7 billion, up 2%-3% from 2013 sales. Pentair
also expects free cash flow to remain in excess of 105% of net
income in 2014.
The company will benefit from improvement in the North American
residential market as well as global food and beverage market,
stabilization across Europe, cost synergies from last year's merger
with Tyco Flow and consistent share repurchases. However, a weak
Australian economy and fluctuations in exchange rates remain
Pentair delivers industry-leading products, services and solutions
to meet diverse needs of customers related to water and other
fluids, thermal management and equipment protection. Notably, the
company has more than 30,000 employees worldwide.
Pentair currently carries a Zacks Rank #3 (Hold). Other
better-ranked stocks worth a look in the industrial products sector
AO Smith Corp.
) all holding a Zacks Rank #2 (Buy).
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