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Alamo's (ALG) Board Okays 7.7% Hike in Quarterly Dividend Rate

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Zacks Equity Research
·3 min read
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Alamo Group Inc. ALG yesterday announced receiving its board of directors’ approval for a hike in the quarterly dividend rate. The reward to shareholders is reflective of the company’s strong cash position and growth opportunities.

Alamo is a specialist in manufacturing infrastructure maintenance and agricultural equipment. The company’s products are widely used in industrial and governmental markets. Over time, it has been increasing shareholder value through dividend payouts and share buybacks.

Inside the Headlines

As noted, the company got a green signal for a 7.7% hike in the quarterly dividend rate. The rate now stands at 14 cents per share. The previous quarterly dividend rate was 13 cents. On an annual basis, the dividend rate now stands at 56 cents per share, up from the previous rate of 52 cents.

The company will pay the new quarterly dividend on Jan 29, 2021, to shareholders of record as of Jan 19, 2021.

Sound Shareholder-Friendly Policies

Its cash dividend payout increased from 40 cents per share in 2017 to 48 cents in 2019. Also, the company’s payouts were $4.6 million or 39 cents per share in the first three quarters of 2020. Notably, the quarterly dividend rate was increased by 8.3% to 13 cents in January 2020.

Share repurchases by Alamo totaled $1.2 million in the last three years. Also, it bought back common shares worth $0.7 million in the first three quarters of 2020.

We believe that an improvement in financial performances might enable the company to reward shareholders handsomely.

Zacks Rank, Price Performance & Estimates Trend

With a market capitalization of $1.6 billion, Alamo currently carries a Zacks Rank #3 (Hold). The company is poised to benefit from strengthening business in Agricultural Division as well as from improvement in the Industrial Division, cost-control measures, buybacks and sound shareholder-friendly policies. However, challenges related to the pandemic are still concerning.

In the past three months, the company’s shares have gained 22.7% compared with 19.6% growth recorded by the industry.




 

The Zacks Consensus Estimate for Alamo’s earnings is pegged at $1.27 for the fourth quarter of 2020, $5.54 for 2020 and $7.27 for 2021. These estimates represent no change from the 60-day-ago figures

Alamo Group, Inc. Price and Consensus

 

Alamo Group, Inc. Price and Consensus
Alamo Group, Inc. Price and Consensus

Alamo Group, Inc. price-consensus-chart | Alamo Group, Inc. Quote

Stocks to Consider

Three better-ranked stocks in the industry are AGCO Corporation AGCO, Deere & Company DE and Lindsay Corporation LNN. While both AGCO and Deere presently sport a Zacks Rank #1 (Strong Buy), Lindsay carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Current-year earnings estimates for the companies have improved in the past 60 days. Further, the earnings surprise in the last four quarters, on average, was 434.48% for AGCO, 52.55% for Deere and 16.84% for Lindsay.

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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Deere & Company (DE) : Free Stock Analysis Report
 
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Lindsay Corporation (LNN) : Free Stock Analysis Report
 
Alamo Group, Inc. (ALG) : Free Stock Analysis Report
 
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