Bemis Rises on Dividend Hike

Zacks

Shares of Bemis Company, Inc. (BMS) went up around 2% and closed at $38.49 after its Board approved a 4% increase in regular quarterly dividend on Feb 6. This marked the company’s 31st consecutive hike in its payout.

Bemis will now pay 27 cents per share to shareholders, which is a penny higher than the prior dividend of 26 cents. The new dividend will be paid on Mar 3, 2014, to shareholders of record on Feb 18, 2014.

The latest increase in distribution depicts the company’s continuous focus on healthy free cash flow generation and its balance sheet strength. Moreover, this rise in dividend comes exactly after a year. The last dividend hike of 4% from 25 cents to 26 cents was announced in Feb 2013.

Bemis, which competes with Berry Plastics Group, Inc. (BERY), Graphic Packaging Holding Company (GPK) and MeadWestvaco Corporation (MWV) in the packaging and containers industry, reported record earnings in 2013. Adjusted earnings per share (EPS) increased 6% year over year to $2.28 and was in line with the Zacks Consensus Estimate. Moreover, it was within the company’s guidance of $2.24 and $2.30 per share.

Management expects adjusted EPS in the range of 55–60 cents for the first quarter of 2014. For 2014, EPS is projected to range between $2.40 and $2.55. Bemis expects cash flow from operating activities to exceed $500 million in 2014. The company anticipates capital expenditure in 2014 to come between $175 million and $200 million.

Lower volumes, a cautious consumer spending environment and a sluggish European economic outlook remain major concerns. However, savings from the Bemis cost reduction program and benefits from acquisitions will likely help offset these headwinds.

Neenah, Wisconsin-based Bemis is a global manufacturer of flexible packaging products and pressure sensitive materials sold primarily to the food industry. The company also sells its products to other customers in the chemical, agri-business, medical, pharmaceutical, personal care, electronics, automotive, construction, and graphic industries.

Bemis currently has a Zacks Rank #3 (Hold).
 

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