Illinois Tool Works Inc.’s (ITW) Board of Directors approved a 10.0% hike in the company’s quarterly dividend rate. The revised quarterly rate now stands at 34 cents per common share compared with 31 cents previously, resulting in an annual rate of $1.36 per common share. The revised dividend will be paid on October 13, to shareholders as of the close of business on September 30.
Illinois Tool Works follows a consistent policy of returning cash to shareholders via dividend payments with roughly $1.7 billion distributed over the last three years.
During the second quarter of 2010, the company paid around $155.8 million in dividends. Cash and cash equivalents at the end of the quarter were $1,265.2 million and net cash from operating activities was around $338.4 million.
Illinois Tool Works is one of the leading manufacturers of industrial products and equipment. The company operates through 800 business units in 57 countries. In the second quarter of 2010, the company reported earnings per share of 83 cents, which reflected an increase of 131% compared with 36 cents in the comparable quarter of 2009. Operating revenue went up 20.1% year over year to $4,076.3 million, compared with $3,392.9 million in the second quarter of 2009.
We believe near-term results of the company will be largely influenced by strength in automotive appliance, industrial packaging, and welding and electronic segments, offset partially by expectation of higher restructuring costs and foreign currency translation.
Over the medium to long term, the company’s prime driving catalysts include strengthening domestic and international businesses, particularly auto markets, strong acquisition pipeline and recovery in economic conditions. However, immense competitive pressure along with a huge exposure to foreign currency puts Illinois Tools in an unfavorable position. Chief competitors include Cooper Industries plc (CBE), General Electric Co. (GE), and Manitowoc Co. Inc. (MTW).
We currently maintain a Neutral recommendation on the stock, which is supported by Zacks #3 (Hold) Rank.
COOPER INDS PLC (CBE): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
ILL TOOL WORKS (ITW): Free Stock Analysis Report
MANITOWOC INC (MTW): Free Stock Analysis Report
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Posted In: Construction & Farm Machinery & Heavy TrucksElectrical Components & EquipmentIndustrial ConglomeratesIndustrial MachineryIndustrials
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