Fortune Brands (FBHS) Announces Quarterly Dividend Hike of 8%
Fortune Brands Home & Security, Inc. FBHS, on Dec 8, announced that it is rewarding shareholders with hike in quarterly dividend rate. This marks its eighth consecutive year of dividend rate increase.
We believe that such shareholder-friendly policies of the company reflect a strong cash position.
Inside the Headlines
As revealed, Fortune Brands’ board of directors approved an 8% or 2 cents per share hike in the quarterly dividend rate, which jumped to 26 cents from 24 cents. On an annualized basis, the dividend increased to $1.04 from 96 cents per share.
Fortune Brands will pay out the revised amount on Mar 17, 2021, to shareholders on record as of Feb 26.
Shareholder-Friendly Policies
Fortune Brands believes in rewarding shareholders handsomely through dividend payments. In the last three years (2017-2019), the company’s cash dividend increased from 72 cents per share in 2017 to 88 cents in 2019. In December 2019, it had raised the quarterly dividend rate by 9%.
Further, the company paid out a dividend of $99.9 million in cash to its shareholders in the first nine months of 2020.
We believe that impressive financial performance in the quarters ahead is likely to enable it to continue rewarding its shareholders handsomely.
Zacks Rank, Price Performance and Estimate Revisions
Fortune Brands, with approximately $11.5 billion market capitalization, currently carries a Zacks Rank #2 (Buy). The company is likely to benefit from solid product portfolio and strength in its operating segments in the quarters ahead. Also, for 2020, it anticipates generating free cash flow of $590-$620 million.
In the past 60 days, the Zacks Consensus Estimate for earnings has increased 6.2% to $4.09 for 2020 and 10.5% to $4.73 for 2021. Also, earnings estimates for the fourth quarter of 2020 have increased 9.4% to 1.16 per share.
In the past six months, the stock has gained 33.9% compared with the industry’s increase of 18.6%.
Other Key Picks
Some other top-ranked stocks from the same space are Allegion plc ALLE, Brady Corporation BRC and Resideo Technologies, Inc. REZI, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Allegion delivered a positive earnings surprise of 17.48%, on average, in the trailing four quarters.
Brady delivered a positive earnings surprise of 2.95%, on average, in the trailing four quarters.
Resideo delivered a positive earnings surprise of 212.23%, on average, in the trailing four quarters.
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