Ingersoll-Rand Plc IR recently raised its quarterly dividend by 18% year over year to 53 cents per share or $ 2.12 on an annualized basis. The increased sum will be paid on Sep 28 to shareholders on record as of Sep 7.
The industrial goods manufacturer has been paying uninterrupted quarterly cash dividends since 1919 and annual dividends since 1910. A steady payout is part of the long-term strategy of Ingersoll to provide attractive risk-adjusted returns to its stockholders. In addition, healthy dividend hikes at periodic intervals have been one of its high points.
Ingersoll continues to focus on its strategic priorities, which include a disciplined capital allocation, strong and flexible balance sheet position and cash flow enhancement to support dividend growth. We believe that such moves along with its robust operating platform and an efficient management team will help in the execution of these strategic priorities and drive net asset value and dividend growth in the future as well.
The company is focusing on improving efficiencies and capabilities of products and services within its core businesses after the divesture of the commercial and residential security businesses. Strategic acquisitions have served as growth drivers, supplementing its organic growth. Furthermore, Ingersoll is likely to achieve steady improvements in operating profitability with new product developments, investments in IT platform and enhancement of channel services footprint and product management capabilities.
Ingersoll has a solid foundation of global brands and leading market share in all major product lines. The geographic and industrial diversity coupled with a large installed product base provides ample growth opportunities within service, spare parts and replacement revenue streams. Additionally, the company’s complementary portfolio of products and services is likely to assist it in strengthening its market position and achieving high productivity to better compete with rivals.
For full-year 2018, Ingersoll has offered a bullish guidance. Management expects adjusted earnings from continuing operations to be within $ 5.00-$ 5.20 per share while revenues are expected to rise 5-5.5%. Cash flow from operating activities is expected to be in the range of $ 1.45 billion to $ 1.55 billion, with free cash flow between $ 1.2 billion to $ 1.3 billion. Such bullish outlook portrays favorable growth dynamics and boosts investor confidence.
With diligent execution of operational plans, the stock has outperformed the industry in the past six months with an average return of 6.8% against a decline of 1.6% for the latter.
Ingersoll currently carries a Zacks Rank #2 (Buy). Some other stocks in the industry worth considering are Altra Industrial Motion Corp. AIMC, IDEX Corporation IEX and Kaman Corporation KAMN, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Altra Industrial Motion topped earnings estimates thrice in the trailing four quarters, with an average beat of 5.1%.
IDEX has a long-term earnings growth expectation of 11%. It surpassed estimates in each of the trailing four quarters with an average positive earnings surprise of 3.1%.
Kaman topped estimates twice in the trailing four quarters with an average positive earnings surprise of 6%.
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Ingersoll-Rand PLC (Ireland) (IR): Free Stock Analysis Report
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