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EnPro Resolves Lawsuit and Initiates Quaterly Dividend - Analyst Blog

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Premium industrial goods company EnPro Industries, Inc. ( NPO ) along with its subsidiary Garlock Sealing Technologies (GST), has inked a definitive agreement with certain court-appointed legal representatives to settle a lawsuit.

The representatives are the petitioners of Asbestos Claims Resolution Process of GST. EnPro has initiated the agreement to retrieve the necessary expenses for fulfilling the asbestos claims imposed on some of its subsidiaries. In a separate news, EnPro Industries has declared an initial quarterly dividend of 20 cents to shareholders of record as of Mar 2, 2015.

The agreement put forward by EnPro comprises a revised plan of reform. If the plan is accepted and implemented by the Bankruptcy Court, then the company would be provided with all required expenses regarding the asbestos claims of its subsidiaries such as Garrison Litigation, Anchor Packing and GST. According to EnPro, the approximate net worth of the revised plan is $205 million. The company is positive about the agreement as it is aimed at settling all asbestos claims of its subsidiaries.

Additionally, the company has announced a quarterly dividend of 20 cents per share. The dividend will be paid in cash on Mar 16, 2015. The company intends to augment shareholders' value through dividend hike in the near future, as per its financial status.

Successful navigation of all asbestos claims and the new dividend program suits EnPro's long-term sustainable business growth model. After resolving the existing lawsuits, the company intends to allocate its capital more efficiently in future. Through better capital allotment and attractive dividend plans, EnPro aims to improve its brand and business status in the long run.

In the last reported quarter, EnPro generated an average earnings surprise of 15.52%. Backed by such strategic legal settlements and growth plans, we expect the stock to perform in line with the broader market in the upcoming quarter.

With a market capitalization of $1.46 billion, EnPro carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Kadant Inc. ( KAI ), Adept Technology Inc. ( ADEP ) and Advanced Emissions Solutions, Inc. ( ADES ). All three stocks currently hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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