Industrial goods manufacturer Graco Inc. GGG recently announced a 10% year-over-year hike in its quarterly dividend payout to 33 cents per share or $1.32 on an annualized basis. The increased dividend will be payable on Feb 3, 2016 to shareholders of record as of Jan 19.
Based on the closing price of $73.75 on Dec 4, 2015, the proposed dividend affirms a yield of 1.8%. A steady dividend payout is part of the long-term strategy of Graco to provide attractive risk-adjusted returns to its stockholders. In addition, healthy dividend increases at periodic intervals have been one of Graco’s strong points. The current dividend increase is the 12th such instance for the company since 2005.
Moving forward, Graco expects to achieve mid-single digit organic sales growth on a constant currency basis across the globe in 2015. With a gradual recovery in the U.S. residential and non-residential construction markets, the company further expects to experience solid demand in the Contractor Americas business. However, recent demand trends combined with macroeconomic headwinds and a continued soft capital equipment environment in the emerging markets of EMEA and Asia Pacific may limit growth to the lower end of the expectations.
Headquartered in Minneapolis, MN, Graco supplies technology for management of fluids in both industrial and commercial applications. The company designs, manufactures, and markets systems that move, measure, control, dispense, and apply fluid materials. The company’s key growth drivers include development and marketing of new products, expansion of the global distribution network, and foraying into new markets with technology and channel expansion and continuous investment in research and development, which quickens new product launches.
Graco currently has a Zacks Rank #3 (Hold). Other stocks in the industry that look promising and are worth a look now include Federal Signal Corp. FSS and Macquarie Infrastructure Corporation MIC, both carrying a Zacks Rank #2 (Buy), and GigOptix, Inc. GIG carrying a Zacks Rank #1 (Strong Buy).
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