Obviously not. What is RPM's dividend record? RPM has increased the cash dividend paid to its stockholders for 36 consecutive years, placing it in an elite category of less than a half percent of all publicly-traded U.S. companies. Only 56 of the 19,000 U.S. public companies have consecutively paid an increasing annual dividend for this period of time or longer, according to the 2010 edition of America's Finest Companies. On October 8, 2009, the Board of Directors increased RPM's quarterly cash dividend to $0.205 per common share, a 2.5% increase over the previous quarterly dividend rate of $0.20 per common share.
Annually increasing its dividend is a long-standing RPM hallmark. Given current uncertain economic conditions, the company is pleased that its strong cash flow has allowed it to continue this practice and deliver stockholders a positive cash return on their investment. As highlighted in its 2009 annual report, for the five-year and ten-year periods ended May 31, 2009, RPM's return to shareholders has outperformed the S&P 500 Index by 38% and 94%, respectively, including the assumed reinvestment of dividends. RPM’s annual dividend growth has been a critical element of its ability to significantly outperform this broad market index and deliver value to RPM shareholders.
When was the last time they cut the dividend? They are pretty proud of announcing each year a very small increase in dividend, but still an increase. I am thinking this year the worse case scenario is no dividend increase. The six analyst covering the stock still give a reasonable prediction of a $1.49 per share profit which still covers the $0.80 annual dividend. The February 09 results will most likely be negative but they only started being the black a couple of years ago. Try not to listen to Cramer and Kudlow (the chicken little brothers)too much.
If for some reason they do cut the dividend, this stock will drop drastically. With the asbestos exposure, the rising dividend was the one indication that management felt that they were moving in the right direction and could handle the liabilities. A dividend cut would signal otherwise and this thing would drop to my guess under $5.
Just because other companies are utting does not mean that RPM has to. In fact the ones that do cut will struggle to regain any momentum in the future.
I have had this stock for many years and love the dividned increases. why not keeo the streal alive and raise the annual by 1 cent. It would inicate to me prudence and confidence.