In an effort to provide incremental returns to shareholders, the board of directors at Apogee Enterprises, Inc. (APOG) approved a 10% increase in its quarterly dividend to 11 cents. Shares of Apogee rose around 1.8% and closed at $42.50 at the end of trading on Jan 16, after this announcement.
The dividend increase of 11 cents per share, a penny more than the prior payout of 10 cents, came after a year and is payable on Feb 19, 2015 to shareholders of record as of Feb 5, 2015. The increased dividend will take Apogee’s dividend yield to 1.04% from the current 0.94%. Based on its outstanding shares of approximately 29 million, the increased dividend will translate to a quarterly payout of $3.2 million and an annual payout of $12.7 million.
A regular disbursement of dividends with occasional hikes has been a common phenomenon for Apogee. This reflects the company’s practice of rewarding shareholders over time and suggests a healthy balance sheet and strong cash position.
Apogee had cash and short-term investments of $34.3 million at the end of the third quarter fiscal 2015 compared with $28.7 million at the end of fiscal 2014. Apogee reported strong third-quarter fiscal 2015 earnings which improved an impressive 42% year over year to 47 cents per share.
For fiscal 2015, Apogee reaffirmed its revenues guidance of at least 20% growth and estimates earnings in the range of $1.64—$1.72. The company is expecting strong year-over-year improvement on the back of its strategies to grow through new geographies, new products and new markets along with focus on productivity and operational improvements.
Strength in architectural business combined with positive forecasts for commercial construction markets will also drive growth. In addition, Apogee extended its long-term outlook to fiscal 2018 expectations for revenues of $1.3 billion and 12% operating margin.
However, macroeconomic challenges are likely continue to be headwinds for Apogee. Additionally, moderating global economic growth and economic uncertainty could reduce the company’s near-term revenue visibility.
Apogee Enterprises is a leader in technologies for the design and development of value-added glass products, services and systems. Apogee currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the industrial product sector include The Babcock & Wilcox Company (BWC), Graco Inc. (GGG) and Middleby Corp. (MIDD). All of these have a Zacks Rank #2 (Buy).
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