Shares of CLARCOR Inc (CLC) hit a 52-week high of $64.31 during yesterday’s trading session before closing at $64.19, reflecting a solid year-to-date return of 31.6%. The trading volume aggregated 145,240 shares.
Despite its strong price appreciation, this Zacks Rank #2 (Hold) stock's fundamentals have the potential to further boost the price. The company’s recent strategic acquisitions and dividend hike were some of the catalysts that drove the stock.
CLARCOR recently hiked its fourth quarter fiscal 2013 dividend to 17 cents per share from 13.5 cents, marking a 25.9% year-over-year increase. A steady dividend payout is part of the long-term strategy of CLARCOR to provide attractive risk-adjusted returns to its stockholders.
Although CLARCOR has steadily increased its dividend each year over the last 30-year period, the current dividend hike is the largest of its kind in the last two decades. Despite the phenomenal increase in its quarterly dividend payout, management continued pursuing strategic acquisitions and investments in capital projects to fuel further growth, driven by its strong cash flows.
In order to expand across Europe and Asia and improve its product portfolio, CLARCOR recently acquired the Bekaert Advanced Filtration business, which is engaged in the same line of business as its subsidiary - Purolator EFP. CLARCOR bought this business from NV Bekaert SA for about $8 million.
Additionally, the current strategy of the company is focused on high-end air filtration products. CLARCOR recently redesigned low-end disposable filter products and developed technology that allows it to manufacture these filters more cost effectively.
Over the last 30 days, none of the analysts revised their estimates upward or downward for 2013, which left the Zacks Consensus Estimate constant at $2.49. Although there is a lacuna of estimate revisions, we envision an uptrend for the stock backed by its strong growth potential.
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