Apogee Enterprises, Inc.APOG’s Board of Directors announced a 10% increase in the quarterly cash dividend, marking its ninth consecutive year of dividend increases. APOG also increased its existing share buyback program by 2 million shares. It now has a total share buyback authorization available of 2.6 million. This move supports Apogee’s commitment to return capital to shareholders through dividends and share buybacks.
Apogee will now pay the new quarterly dividend of 22 cents per share, bringing the annualized dividend rate to 88 cents. The dividend will be paid on February 15 to shareholders of record at the close of business on January 31, 2022. The increased dividend raises the current dividend yield from 1.69% to 1.75%, higher than the industry’s 0.49%. Over the nine-year period, the company’s dividend rate more than doubled, from 9 cents to the currently announced payout of 22 cents per share.
Apogee has a three-year dividend growth rate of 8.3%. It has a payout ratio of 36.2%, higher than the industry’s 5.9%. APOG’s strong liquidity position, coupled with strong free cash flow, positions it well for growth. So far in fiscal 2022, APOG has returned $44.2 million to its shareholders through share buybacks and dividend payments. It has no material debt maturities before 2024 and no outstanding borrowings under its $235 million revolving credit facility. So far this year, APOG has generated $73 million in free cash flow, or more than 180% of adjusted net earnings. This provides many opportunities for APOG to invest in business and return money to its shareholders.
Apogee is firmly focused on reducing its level of indebtedness. Its net debt was $84.7 million at the end of the third quarter of fiscal 2022, the lowest since fiscal 2017. APOG’s total debt to total equity ratio also stands at 25, 6%, which suggests its ability to honor its debts.
Last month, Apogee reported adjusted earnings per share (EPS) for the third quarter of fiscal 2022 of 63 cents, beating Zacks’ consensus estimate of 53 cents, but down 30% from a year earlier. on the other. APOG has a four-quarter earnings surprise of 11.9% on average.
Apogee consistently enjoys strong performance in the architectural services segment. The segment’s revenue reached a record $92 million in the third quarter of fiscal 2022. The same won several awards for new projects and built a pipeline of projects for the coming years. Large-scale optical unit performance indicates steady improvement in demand from pandemic-induced declines in 2021. The framing systems segment saw solid year-over-year growth and a increased margins in the third fiscal quarter. APOG’s segments have the potential to increase market share, expand into new geographies and new markets, and introduce products.
Given its strong growth outlook, Apogee forecasts adjusted EPS for fiscal 2022 between $2.25 and $2.40. APOG reported adjusted EPS of $2.40 for fiscal year 2021. Cost reduction initiatives and procurement efficiencies will deliver significant savings in fiscal year 2022. In fact, the benefits Pricing and restructuring actions and efforts to boost productivity will improve APOG’s bottom line in the year. fourth trimester.
Apogee shares have gained 36.8% in the past year against a 35.8% decline in the sector.
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Zacks Ranking and Stocks to Consider
Apogee currently carries a Zacks Rank #3 (Hold).
Some higher ranked stocks in the industrials sector are Berry Global Group, Inc. BERY, AGCO Company AGCO and WW Grainger, Inc. GWW. While BERY carries Zacks Rank #1 (Strong Buy), AGCO and GWW carry Zacks Rank #2 (Buy). You can see the full list of today’s Zacks #1 Rank stocks here.
Berry Global Group has an estimated earnings growth rate of approximately 2.8% for fiscal year 2022. In the past 60 days, Zacks’ consensus estimate for earnings for fiscal year 2022 has been revised to the 18% increase.
In one year, the title rose by 30.5%. Berry Global Group has a four-quarter earnings surprise of 16.5% on average.
AGCO Corporation has an expected earnings growth rate of 16.3% for 2022. The Zacks consensus estimate for current-year earnings has moved north 1% in the past 60 days .
Shares of AGCO Corporation have gained 9.8% over the past year. AGCO has a surprise on earnings for the last four quarters of 47.5% on average.
Grainger forecasts a 20.1% profit growth rate for the current year. The Zacks consensus estimate for 2022 revenue has been increased by 0.5% over the past 60 days.
GWW shares have gained 34.8% in one year. Grainger has a long-term earnings growth rate of 13%.
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