Valmont Industries, Inc. (VMI) recently announced a roughly 11% hike in its quarterly dividend to 25 cents per share from the prior payout of 22.5 cents. Annualized, this represents a payout of $1.00 per share. The increased dividend will be paid on Jul 15, 2013, to stockholders of record as of Jun 28, 2013.
The dividend increase is a testimony of the company’s healthy balance sheet. Valmont Industries’ cash and cash equivalents stood at $420 million as of Mar 31, 2013, compared with of $339.6 million as of Mar 31, 2012. Total long-term debt declined 0.4% year over year to $472.2 million.
Valmont Industries is among the prominent steel-pipe and tube companies along with MRC Global Inc. (MRC), Mueller Water Products Inc. (MWA) and Tenaris SA (TS). It is one of the world’s largest designers and producers of poles, towers and structures for lighting and traffic, wireless communication and utility markets, industrial access systems, highway safety barriers and a provider of protective coating services. It also produces mechanized irrigation equipment for agriculture, enhances food production while conserving and protecting natural water resources.
Valmont Industries posted impressive first-quarter 2013 results on Apr 18. Earnings of $2.89 per share in the reported quarter outpaced the Zacks Consensus Estimate of $2.50 and exceeded the year-ago earnings of $1.96 by roughly 47%.
Valmont industries realized a one-time tax benefit of $3.2 million as a result of the divestment of a non-consolidated South African subsidiary. The net effect of the transaction for the quarter was a benefit of 6 cents per share. Two acquisitions, Pure Metal and Locker, added about a penny to earnings per share in the quarter.
Revenues came in at $819.6 million in the first quarter, up roughly 14% year over year. It exceeded the Zacks Consensus Estimate of $809 million. Revenues were driven by strong sales growth in both the Utility Support Structures and Irrigation segments, and acquisition-driven sales growth.
Valmont Industries expects continued strength in its utility business in 2013, manifested by healthy order backlogs. It also expects a strong second quarter for the Irrigation division. The demand for the Irrigation segment for second quarter will depend on growing conditions, commodity prices and the expectations for farm income later in the year.
Valmont Industries also expects improved sales and operating comparisons in the engineered infrastructure products segment for the rest of 2013. For the coatings segment, Valmont Industries expects its performance to improve over the balance of the year as it fully integrates the Pure Metal acquisition and sees improved demand in Australia.
Valmont Industries currently carries a Zacks Rank #2 (Buy).
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