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Patterson Companies to announce dividend increase

What's Happening

Dental health product manufacturer Patterson Companies ( PDCO ) is likely to announce a dividend increase this week. The company has a seven-year streak of increases, and currently has a yield of 2.15%. PDCO shares have risen 4.9% on the year.

Technical Analysis

PDCO was recently trading at $44.65, down $5.75 from its 12-month high and $8.19 above its 12-month low. Overall technical indicators for PDCO are bullish with a weak upward trend. The stock has recent support above $42.50 and recent resistance below $46.05. Of the nine analysts who cover the stock, three rate it a "strong buy", five rate it a "hold", and one rates it a "sell". The stock receives S&P Capital IQ's 3 STARS "Hold" ranking.

Analyst's Thoughts

Patterson Companies has a seven-year streak of increases, and with a payout ratio of just 41.7%, the company can easily afford to extend its streak when it announces its next dividend. The company tends to announce its dividend increases during the third week of March, and there is no reason to believe the company will veer from that schedule this year. Last year the company boosted its dividend by 9.0%, and in the previous year it boosted its payout by 10.0%. Expect a similar increase this year, with the quarterly distribution rising from $0.24 to around $0.27, which would translate to an increase of 12.5%. Expect the announcement this week, with the stock trading ex-dividend mid-April.

Stock Only Trade

Bullish Trade

There are no bullish hedged trades we like on the stock at this time.

Bearish Trade

If you want to take a bearish stance on the stock at this time, consider a July 47/50 bear-call credit spread for a 20-cent credit. That's a potential 7.1% return (19.6% annualized*) and the stock would have to rise 5.7% to cause a problem.

Covered Call Trade

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

Originally published on InvestorsObserver.com


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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