Standard Motor Hikes Dividend - Analyst Blog

Standard Motor Products Inc. (SMP) announced that it has raised its quarterly dividend by 40% from 5 cents per share to 7 cents per share. The increased dividend will be paid on March 1, 2011 to shareholders of record as of February 15, 2011.

Standard Motor had suspended its quarterly dividend payment in 2009 due to the global economic crisis. However, the company's board reinstated its dividend at 5 cents per share in January last year.

Standard Motor Products enjoys strong brand recognition worldwide. Successful research and development and perfect strategic acquisitions have helped the company to enrich its product portfolio and maintain a broad customer base. It has also shown efficiency in managing its debt and reducing its manufacturing expenses to mitigate the effects of the weak economy.

In the third quarter of 2010, Standard Motor posted a profit of $9.8 million or 43 cents per share, surpassing the Zacks Consensus Estimate of 29 cents per share. The profit was also higher than the year ago level of $6.6 million or 35 cents per share. Consolidated net sales increased 11% to $637.9 million during the quarter.

Due to the above factors, Standard Motor retains a Zacks #2 Rank on its stock, which translates to a short term recommendation of ‘Buy'.