DENTSPLY Boosts Dividend by 13.6%


Dental and healthcare products company – DENTSPLY International Inc. (XRAY) raised its quarterly cash dividend by 13.6% to 6.25 cents from 5.50 cents. This increases the annual dividend to 25 cents per share from the current payout of 22 cents, which equates to a dividend yield of roughly 0.6%. The revised quarterly dividend is payable on Apr 12, 2013, to shareholders of record as on Mar 29, 2013.
The dividend increase underscores DENTSPLY’s commitment to deliver incremental returns to investors leveraging a solid balance sheet, healthy free cash flow and earnings power. The company’s previous dividend increase was in Nov 2011, when it raised the annual payout by 10% to 22 cents a share from 20 cents.
DENTSPLY is poised to grow its share in the dental consumable market, driven by a strong product base and significant investment in product/technology innovation and sales/marketing infrastructure. The company has been delivering strong earnings, as it managed to beat the Zacks Consensus Estimate in three of the last four quarters, while meeting the same on one occasion. In the last reported fourth quarter, DENTSPLY posted an earnings surprise of 1.82%.
However, the Zacks Consensus Estimate for earnings dropped 3.4% for the first quarter of 2013 in the last 60 days, reflecting negative investor sentiments for the upcoming quarter. The current Zacks Consensus Estimates for the first quarter and full year 2013 are 57 cents and $2.43, respectively.
The company’s share price remained roughly unchanged to close at $40.88 on Feb 26, 2013. This might reflect on the fact that the news was unable to encourage investors towards the stock.
The company currently has a Zacks Rank #4 (Sell). Medical/Dental Supplies companies worth a look are Medical Action Industries Inc. (MDCI), Steris Corp. (STE) and The Cooper Companies Inc. (COO). Medical Action carries a Zacks Rank #1 (Strong Buy), while the other two companies carry a Zacks Rank #2 (Buy).
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