On May 12, shares of
) achieved a new 52-week high of $67.79. The company's strong
fundamentals and a robust balance sheet drove the upside. The stock
returned over 117% in the 1-year period compared with Nasdaq's
return of just about 21%.
The company recently reported first-quarter 2014 results with
earnings of $1.17 per share falling short of the Zacks Consensus
Estimate of $1.18 per share. However, earnings increased 18.2%
compared to last year's figure of 99 cents.
In its effort to share more profits with shareholders, VSE also
announced an 11% increase in its quarterly dividend to 10 cents
from 9 cents per share paid on May 5, 2014. The increased dividend
will be paid on Aug 16, 2014 to shareholders of record on Jul
The dividend hike is well supported by the company's healthy
financial position. In the first quarter of 2014, its cash and cash
equivalents stood at $0.35 million, marking a year-over-year
increase of 62.3%. Moreover, VSE's strong cash flow position
allowed it to reduce its debts significantly by 18.3% in the
The company's persistent efforts to diversify and expand its
business while simultaneously reducing costs were some of its key
growth drivers. VSE has been focused on expanding its products and
services to diversify its business portfolio. It now provides
solutions for maintenance of vehicle, ship and aircraft as well as
service life extension, and logistics support to markets other than
the U.S. Department of Defense. These high margin businesses
comprised more than 50% of the company's total sales in 2013.
The company's business had been sluggish since 2012 owing to the
weak economic conditions. Also, the decline in demand from the U.S.
government in 2013 impacted the company's business negatively.
However, investors sentiments improved as the budgetary woes
finally ebbed and Obama's $1.1 trillion Omnibus spending measure
bill was passed in Jan 2014. This is likely to benefit the
company's business in the legacy defense markets going forward.
Another stock in the same industry that was recently in news is
Foster Wheeler AG
), which scaled a new 52-week high of $34.41 on May 6, 2014.
VSE currently carries a Zacks Rank #4 (Sell). Some other stocks
worth consideration in the engineering and heavy industry include
Pernix Group Inc
Willdan Group, Inc.
). Both of these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
FOSTER WHELR AG (FWLT): Free Stock Analysis
PERNIX GROUP (PRXG): Get Free Report
VSE CORP (VSEC): Free Stock Analysis Report
WILLDAN GROUP (WLDN): Get Free Report
To read this article on Zacks.com click here.