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Graco (GGG) Announces 7.1% Hike in Quarterly Dividend Rate

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Graco Inc. GGG, on Dec 4, announced that it is rewarding shareholders with hike in quarterly dividend rate. The raise is supported by the company’s strong cash position.

Notably, the company’s shares moved up 1.3% to close at $66.99 on Friday.

Inside the Headlines

As revealed, Graco’s board of directors approved a 7.1% or 1.25 cents per share hike in the quarterly dividend rate, which now moved from 17.5 cents to 18.75 cents. On an annualized basis, the dividend increased to 75 cents from 70 cents per share.

Graco will pay out the revised amount on Feb 3, 2021, to shareholders on record as of Jan 19.

Shareholder-Friendly Policies

Graco firmly believes in rewarding shareholders handsomely through dividend payments. In the last two years (2018-2019), the company’s cash dividend paid out increased from 53 cents per share in 2018 to 64 cents in 2019. Also, in December 2019, it had raised the quarterly dividend rate by 9.4%.

Further, in the first three quarters of 2020, the company paid out a dividend of $87.7 million in cash to its shareholders, reflecting an increase of 9.9% from the year-ago comparable period.

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

Graco, with approximately $11.2 billion market capitalization, currently carries a Zacks Rank #2 (Buy). The company is poised to benefit from its exposure in new markets, global expansion and buyout activities. Also, exiting the third quarter of 2020, the company’s cash and cash equivalents totaled $424.7 million, whereas it had a long-term debt balance of $275 million.

In the past 60 days, the Zacks Consensus Estimate for earnings has increased 17.2% to $1.84 for 2020 and 14.3% to $2.08 for 2021. Also, earnings estimates for the fourth quarter of 2020 have increased 21.4% to 51 cents per share.

In the past six months, the stock has gained 25.3% compared with the industry’s increase of 19.6%.

Other Key Picks

Some other top-ranked stocks from the same space are Altra Industrial Motion Corp. AIMC, Applied Industrial Technologies, Inc. AIT and Dover Corporation DOV. While Altra Industrial currently sports a Zacks Rank #1 (Strong Buy), Applied Industrial and Dover carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altra Industrial delivered a positive earnings surprise of 50.07%, on average, in the trailing four quarters.

Applied Industrial delivered a positive earnings surprise of 14.68%, on average, in the trailing four quarters.

Dover delivered a positive earnings surprise of 18.10%, on average, in the trailing four quarters.

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