After reporting impressive results for the first quarter 2013, Lennox International, Inc. (LII) recently made another major announcement of an increase in its quarterly dividend rate.
The new dividend rate has been fixed at 24 cents, an increase of 20% over the previous rate of 20 cents and will be paid on July 15, 2013 to shareholders of record as on June 28, 2013. The revised rate equates to an annual dividend rate of 96 cents per share.
Consistent dividend payments with occasional increases and share buybacks have been the company’s favoured mode of rewarding its shareholders over time. Prior to this increase, in Sep 2012, Lennox International made a similar announcement of an 11% increase in its quarterly dividend rate surging from 18 cents to 20 cents. Share buyback program worth $300 million was approved in Dec 2012, which was an addition to its $71 million program pending under an earlier authorization that time.
If we steal a look into the results of the quarter ended Mar 31, 2013, we find that Lennox International repurchased shares worth $4.2 million in the quarter while dividend payments were nil. Management for 2013 anticipates repurchasing of shares worth $100 million and lowering its share count to 50 million at the end of the year.
Apart from the capital deployment actions of Lennox International, a brief discussion on the financial results of the company’s first quarter 2013 is also given below:
The company’s earnings per share in the quarter came in at 33 cents, up 74% year over year and 22.2% above the Zacks Consensus Estimate of 27 cents.
Results on a year-over-year basis benefited from a 9% top-line growth, partially offset by 6.9% and 10.1% increase in costs of sales and selling, general and administrative expenses, respectively.
The Zacks Consensus Estimate for Lennox International currently stands at $1.18 for the second quarter 2013, reflecting an increase of 22.6% year over year. Earnings Estimate for 2013 and 2014 are at $3.44 and $4.02, up 27.3% and 17.0%, respectively.
Lennox International currently has a market capitalization of $3.2 billion and carries a Zacks Rank #2 (Buy). Other stocks to watch out for are Comfort Systems USA Inc. (FIX), Honeywell International Inc. (HON) and Compass Diversified Holdings (CODI), each with a Zacks Rank #2 (Buy).
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