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Terex Pleases Investors With 25% Quarterly Dividend Hike

Zacks Equity Research

Terex Corporation TEX recently hiked its quarterly dividend by 25% to 10 cents per share.  This move reflects the company’s balance sheet strength and improved cost structure.

The increased dividend will be paid on Mar 19 to shareholders of record as of Mar 9, 2018. The last dividend hike was announced in February 2017, when it was raised by 14% from 7 cents per share to 8 cents per share.

Terex has consistently paid quarterly cash dividend since 2013. Over the span of five years, its dividend has grown from payout of 5 cents per share to the current payout of 10 cents.

Terex Corporation Price


Terex Corporation Price | Terex Corporation Quote

Notably, Terex will continue to execute disciplined capital-allocation strategy and return capital to shareholders. In September 2017, the company monetized its remaining holdings of Konecranes shares for $221 million. Further in August, the company completed the repricing of term loan which will reduce interest costs.

In addition, Terex repurchased around 22.3 million shares in the first nine months of 2017. Its board authorized a new share repurchase program in the third quarter, of up to $225 million, of which $154 million was remaining as of Sep 30, 2017.

Moreover, the disciplined capital-allocation strategy, including the efficient return of capital to shareholders through share repurchases and dividend hikes, will drive Terex’s growth.

However, over the past year, Terex’s shares have underperformed the industry it belongs to due to the challenging cranes market. The company’s shares have rallied 31% compared to 50% growth recorded by the industry.

Zacks Rank & Key Picks

Terex currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same sector include H&E Equipment Services, Inc. HEES, Caterpillar Inc. CAT and Astec Industries, Inc. ASTE. While H&E Equipment Services sports a Zacks Rank #1 (Strong Buy), Caterpillar and Astec carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

H&E Equipment Services has a long-term earnings growth rate of 18.6%. Its shares have appreciated 68.2%, over the past six months.

Caterpillar has a long-term earnings growth rate of 10.3%. The company’s shares have been up 31.2% during the same time frame.

Astec has a long-term earnings growth rate of 10%. The stock has gained 23.3% in six months’ time.

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