Raven Hikes Dividend


Raven Industries Inc. (RAVN) announced that its board of directors has approved a 17% increase to its regular quarterly dividend. This is the 26th consecutive enhancement in its dividend payment.

Raven will now pay 21 cents per share to its shareholders, 3 cents more than the prior dividend of 18 cents per share. The increased dividend will be paid on April 25, 2011, to shareholders of record as on April 10, 2011.

Raven has a long history of hiking dividends. The current hike comes exactly after a year. The company had last increased its dividend, in March 2011, from 16 cents to 18 cents.

Raven recently reported strong fourth quarter financial numbers. It delivered earnings of 60 cents per share, increasing 46% from the 41 cents per share earned in the year-ago quarter. Sales increased 36% year over year to $96.3 million. The outperformance was attributable to double-digit sales seen across all segments.

Raven’s fiscal 2012 earnings were $2.77 per share, surpassing the prior-year figure of $2.24 per share while revenues surged 21% to $381.5 million.

Raven had a cash balance of $25.8 million as of January 31, 2012, down from $39 million as of January 31, 2011. The lower cash balance was largely due to higher capital expenditures and a $12 million payment for the Vista Research, Inc. acquisition. The company also reported $43.8 million of cash from operating activities, up from $42.1 million in fiscal 2010. The company returned approximately $13 million cash to shareholders through dividends in fiscal 2011. The fiscal marked the 40th year of the company’s consecutive dividend payments.

The company continues with its strategy of investing significantly in the research and development, thereby, helping to maintain the strong financial results. In addition, Raven has ample scope to fund future growth and increase dividends with the support from debt-free balance sheet and solid cash flow. Thus, we have a Zacks #2 Rank, implying a short-term “Buy” recommendation for the stock.

South Dakota-based Raven Industries Inc. is an industrial manufacturer providing a variety of products for the agricultural, industrial, construction and military/aerospace markets. The company operates through four business segments: Engineered Films, Electronic Systems, Applied Technology and Aerostar. Graco Inc. (GGG) and Spartech Corp. (SEH) are its peers.

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