Owens Corning (OC) Rewards Investors With 15% Dividend Hike
Owens Corning OC has boosted investors’ sentiments with a 15% hike in its quarterly cash dividend payments.
The board of directors of this developer and producer of building materials systems and composite solutions approved a quarterly dividend payout of 60 cents per share ($2.40 per share annually), up from the previous dividend payout of 52 cents per share ($2.08 per share annually). The amount will be paid out on Jan 19, 2024, to shareholders of record as of Jan 8. Based on the closing price of $141 per share on Dec 7, 2023, the stock has a dividend yield of 1.7%.
Owens Corning has been encouraging shareholder value through regular dividend payments since June 1995. Its long-term financial outlook and generation of cash flow on the back of its capital allocation strategy have helped the company hike its cash dividends for the ninth time since 2014.
Following the announcement, shares of OC gained 1.1% in the after-hours trading session on Dec 7.
Product Innovation & Favorable Pricing Driving Growth
Owens Corning persistently focuses on strategic investments that aim at new product and process innovation, which, in turn, help in supporting customers and generating additional growth. It anticipates gaining from the existing product portfolio and initiatives to enhance its production efficiency. Also, it is notably benefiting from its accretive pricing initiatives.
During the first nine months of 2023, OC continued to accelerate its product and process innovation, unveiling 25 newer or refreshed products across core platforms in Roofing, Insulation and Composite businesses. Furthermore, the company is most likely to make a huge investment in its Medina, OH facility to expand its laminate manufacturing capacity to support its roofing business. This new product lineup is expected to run by the end of 2025.
Coming to pricing initiatives, during the third quarter of 2023, positive pricing and a favorable mix in the Insulation business helped the company partially mitigate the decline in revenues due to reduced volumes across businesses. The company expects pricing to remain healthy in the fourth quarter in both Roofing and Insulation businesses.
Moreover, OC’s healthy balance sheet position helped it maintain its shareholder value. During third-quarter 2023, the company returned $187 million to shareholders through dividends and share repurchases. Also, as of Sep 30, 2023, it had cash and cash equivalents of $1.3 billion, up from $1.1 billion at 2022-end.
Price Performance
Shares of Owens Corning have surged 51.9% in the past year, outperforming the Zacks Building Products - Miscellaneous industry’s 39.3% growth.
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Adding to the uptrend, for the to-be-reported quarter, earnings are pegged at $2.78 per share, suggesting a gain of 11.7% from the year-ago quarter’s figure of earnings of $2.49 per share. On the other hand, the Zacks Consensus Estimate for net sales is pinned at $2.23 billion, indicating a 2.4% decrease year over year. Low volumes and the impact of the sale of the Russian operation have adversely impacted the performance. Nonetheless, Owens Corning’s consistent focus on productivity and process innovations will help it to ensure growth momentum in the upcoming period.
Zacks Rank & Key Picks
Owens Corning currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Construction sector.
EMCOR Group, Inc. EME presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter earnings surprise of 25%, on average. Shares of EME have rallied 43% in the past year. The Zacks Consensus Estimate for EME’s 2023 sales and earnings per share (EPS) indicates an improvement of 12% and 52.8%, respectively, from the prior-year levels.
M-tron Industries, Inc. MPTI currently sports a Zacks Rank of 1. MPTI delivered a trailing four-quarter earnings surprise of 35.6%, on average. It has surged 255.9% in the past year.
The Zacks Consensus Estimate for MPTI’s 2023 sales and EPS indicates growth of 30.6% and 156.7%, respectively, from the previous year.
Willdan Group, Inc. WLDN currently sports a Zacks Rank of 1. WLDN delivered a trailing four-quarter earnings surprise of a whopping 850.6%, on average. The stock has gained 40.9% in the past year.
The Zacks Consensus Estimate for WLDN’s 2023 sales and EPS indicates growth of 14.1% and 47.7%, respectively, from a year ago.
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