In a bid to boost shareholders' return,
Tractor Supply Company
) recently increased its quarterly dividend by 67%, or 8 cents, to
20 cents. The company used to pay dividend of 12 cents.
The increased dividend will be paid on June 5, 2012 to the
shareholders of record as of May 21, 2012. The dividend yield based
on the increased dividend and the current stock price is 0.8%.
The hike in the quarterly dividend was primarily aided by the
company's strong balance sheet position and ability to generate
excessive free cash flow. Moreover, the increase clearly signifies
the company's potential to improve continuously in the long term.
The company remains focused on maximizing its profits by
continuously enhancing its merchandise assortments and improving
Going ahead in 2012, the company expects its profits to grow
continually, given the right mix of products and marketing
The company lately reported a very encouraging first quarter
2012, achieving $1 billion in total sales for the first time in the
company's history. Tractor Supply's first-quarter results benefited
mainly from the structural improvements made over the years. This
enabled the company to adjust its offerings to suit customer demand
and to promptly respond to events, such as the early onset of
spring in March 2012.
Encouraged by strong first-quarter results, the company raised
its fiscal 2012 earnings guidance range to $3.52 to $3.60 per
share, compared with its earlier forecast of $3.38 to $3.46 per
share. Moreover, net income for the year is estimated to be in the
$260 - $265 million range, above the prior estimate of $246 - $253
Net sales for fiscal 2012 has also been raised to $4.61 - $4.68
billion versus the previous guidance of $4.56 - $4.66 billion. In
fiscal 2012, same-store sales are expected to register an increase
of 4.0% to 5.5%, up from its prior forecast of 3% to 5%.
Furthermore, the company has planned to open 90 to 95 new stores
during fiscal 2012.
Tractor Supply is the largest operator of farm and ranch stores
in the U.S., a unique market niche that serves the lifestyle needs
of recreational farmers and ranchers. The company's stores are
strategically located in small towns, close to its target
customers, which provides a competitive edge over its rivals, such
The Home Depot Inc.
Lowe's Companies Inc.
The company's shares maintain a Zacks #1 Rank, which translates
into a short-term 'Strong Buy' rating. Our long-term recommendation
on the stock remains 'Outperform'.
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TRACTOR SUPPLY (TSCO): Free Stock Analysis
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