The board of Pentair plc PNR has raised the company’s annual dividend by 5% to $1.32 per share from the previous payout of $1.28 per share. This marks the company’s 40th consecutive dividend hike.
Payment of the dividend will be made in four equal quarterly installments of 33 cents per share, in each of the first and second quarters and 34 cents in each of the third and fourth quarters. The new dividend will be paid on Feb12, 2016 to shareholders of record at the close of business on Jan 29, 2016. Pentair had last hiked its dividend in 2014, by 16% to $1.28 per share.
In line with its commitment to return cash to shareholders, Pentair’s board of directors had also authorized the repurchase of shares worth up to $1 billion with an expiry date of Dec31, 2019. During the first three quarters of 2015, Pentair repurchased 3.1 million of its shares for $200 million, pursuant to the authorization. As of Sep 26, 2015, Pentair had $800 million available for share repurchases under this authorization. Pentair also paid dividends of around $173.3 million in the first three quarters of 2015, or 96 cents per ordinary share, compared with $156.2 million, or 80 cents per ordinary share, in the prior-year period. In total, the company has paid back $373 million to its shareholders so far in the current year.
During its third-quarter conference call, Pentair updated its 2015 earnings per share guidance to a range of $3.84 to $3.86, up from the prior guidance of $3.80 to $3.90.. The company expects to generate sales of $6.4 billion in 2015.
Pentair will continue to aggressively manage its cost structure and drive productivity to work through near-term challenges. It is also investing in its high-performing Technical Solutions and Water Quality Systems segments where it sees strategic organic and inorganic growth opportunities. Pentair's acquisition of ERICO will be highly accretive to 2016 earnings. However, Pentair’s energy-related businesses will remain challenged through the rest of 2015, given the slump in oil prices. Moreover, a stronger US dollar, and weakness in the Valves and Controls segment will have a negative impact on Pentair’s results.
Pentair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industrial products sector include TriMas Corporation TRS, John Bean Technologies Corporation JBT and Worthington Industries, Inc. WOR. All these stocks carry a Zacks Rank #2 (Buy).
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