Security and protection services provider The ADT Corporation (ADT) recently announced a 5% year-over-year hike to its dividend payout. The quarterly dividend now comes to 21 cents or 84 cents per share on an annualized basis. The increased cash dividend is payable on Feb 18 to shareholders of record as of Jan 28.
Based on the closing price of $35.84 on Jan 8, 2015, the proposed dividend translates into a yield of 2.3%. A steady dividend payout is part of the long-term strategy of ADT to provide attractive risk-adjusted returns to its stockholders. The company has paid a steady dividend ever since its inception as a standalone listed firm in Oct 2012.
Headquartered in Boca Raton, FL, ADT offers electronic security products along with a wide range of interactive home and business automation and monitoring services for residences and small businesses in the U.S. and Canada.
ADT’s electronic security and home/business automation solutions primarily include installation and monitoring of residential and small business security and premises automation systems. These products are designed to detect intrusion; control access; react to movement, smoke, carbon monoxide, flooding, temperature and other environmental conditions and hazards; and address personal emergencies, such as injuries, medical emergencies or incapacitation.
ADT has a single operating segment. The products and services of the company comprise ADT Pulse interactive home and business solutions, home health services, and monitoring center supported personal emergency response system products and services.
The company also provides technical services for the maintenance and installation of upgraded or additional equipment. ADT delivers an integrated customer experience by maintaining the industry's largest sales, installation and service field force along with a robust monitoring network.
ADT believes monitored security and home/business automation services remain under-penetrated in North American households. In addition, rising concerns about crime and security issues (especially by an aging population), increasing customer interest in lifestyle and business productivity, and technology advancements are likely to support the higher penetration of interactive services and home/business automation.
As such, the company envisions significant growth potential and intends to capitalize on this opportunity by leveraging on its efficient operating model and lower technology costs over time. These would then enable the company to considerably reduce the cost of basic installation and services, thereby making it affordable for a wider market acceptance by a larger portion of households and businesses. We remain encouraged with such inherent growth prospects of the company.
ADT currently carries a Zacks Rank #3 (Hold). Other stocks that are worth considering in the industry include Franklin Covey Co. (FC), NV5 Holdings, Inc. (NVEE) and Stantec Inc. (STN), each carrying a Zacks Rank #2 (Buy).
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