In 2009, sluggishness in the automotive and construction
markets put the squeeze on steel processors.
Worthington Industries (
) processes steel for the auto, construction, aerospace and
hardware industries. The company also makes hand torches, steel
pallets and scuba, propane and other tanks.
Faced with tight times in '09, Worthington slashed the
quarterly dividend from 17 cents a share to 10 cents a share.
Things appear to be back on track. Worthington raised its
quarterly payout to 12 cents a share in 2011 and to 13 cents a
share last year.
In December, the company accelerated the payout, paying a
total of 26 cents a share to cover fiscal Q3 ending this month
and fiscal Q4 ending in May. That leaves only two quarters of
taxable dividends in 2013.
Many companies took similar steps to help investors avoid a
possible increase in the tax on dividends.
Worthington's current annualized dividend yield is 1.8%. Keep
in mind, though, that with the accelerated payouts last year,
investors who buy shares now probably won't see a dividend
payment until fiscal Q1 ending in August.
So, as it stands now, new investors will see two dividend
payments rather than four.
More than a third of Worthington's total sales are tied to the
automotive industry. The auto industry is doing fairly well now,
and that's helping Worthington.
The Columbus, Ohio-based small cap delivered EPS growth of 6%,
7%, 40% and 165% in the past four quarters. Revenue grew 7%, 12%,
11% and 10% in the same periods.
Analysts expect EPS to advance 32% in the current quarter.
Revenue is expected to step up 8%.
The three-year Earnings Stability Factor is 22 on a scale of 0
(calm) to 99 (wild).
Return on equity, a gauge of financial efficiency, has risen
three years in a row. In fiscal 2012, ROE was 16.7%, just shy of
the 17% minimum associated with the best stocks.
The company has been stepping up growth via acquisitions. In
September, Worthington bought Westerman Cos., a maker of tanks
and pressure vessels for the nuclear and oil and gas
Worthington Industries was No. 21 in the IBD 50, as of