Cooper Industries - Growth And Income - Zacks Rank Buy
Cooper Industries plc (CBE), which recently announced the opening of a new manufacturing facility in Dammam, Kingdom of Saudi Arabia, declared a quarterly dividend of 25 cents in early November. The company offers an industry-leading dividend yield of 2.3%.
Company Description
Cooper Industries plc is a diversified global manufacturer of electrical components and tools, with 2008 revenues of $6.5 billion.
The company has 8 operating divisions, which include Bussmann electrical and electronic fuses, Crouse-Hinds and CEAG explosion-proof electrical equipment, Halo and Metalux lighting fixtures and Kyle and McGraw-Edison power systems products.
The company's products include fittings, wiring devices, plugs, receptacles, lighting fixtures and controls, hazardous duty electrical equipment, explosion proof instrumentation, fuses, emergency lighting systems, fire detection and mass notification systems to name a few. Cooper also makes and sells hand tools for industrial, construction, electronics, and consumer markets.
Cooper noted that in 2008, 61% of total sales were to customers in the industrial and utility end-markets and 37% of total sales were to customers outside the United States. Cooper has manufacturing facilities in 23 countries, and employs more than 25,000 people throughout the world.
The company said its broad range of products uniquely positions Cooper for several long-term growth trends, including the current global infrastructure build-out, improvements to enhance the reliability and productivity of the electric grid, the increased demand for higher energy-efficient products and the need for improved electrical safety.
Recent Events
Cooper Industries recently announced the opening of a new manufacturing facility in Dammam, Kingdom of Saudi Arabia. The company said the new facility will significantly reduce Cooper's delivery lead times for product orders and specification configurations in the Gulf Countries Continuum (GCC). The new Cooper facility will offer an extensive line of electrical products, components and engineering services for the region's growing oil and gas market.
Cooper also recently announced the acquisition of Texas-based Pauluhn Electric from Federal Signal Corporation (FSS). Cooper described Pauluhn Electric as a leading provider of specialized marine, offshore and industrial lighting and connecting product solutions for harsh and hazardous locations and corrosive environments.
Cooper management said the acquisition of Pauluhn Electric complements Cooper's global-leading Cooper Crouse-Hinds' harsh and hazardous product offering and enables the company to continue to provide customers with increasingly comprehensive, highly-specified solutions that enhance safety and productivity in demanding environments around the world.
"Cooper has an exceptionally strong balance sheet and continues to maintain a focused and disciplined acquisition strategy, despite a challenging macroeconomic environment," said Chairman and Chief Executive Officer Kirk S. Hachigian. "We remain committed to building key business and technology platforms that provide substantial growth opportunities in more specification-driven end markets."
Rewarding Shareholders
Cooper declared a quarterly dividend of 25 cents in early November. The dividend is payable January 4 to shareholders of record on November 30.
The company offers an industry-leading dividend yield of 2.3%.
Solid Results and Higher Forecasts
The company has been outperforming the market over the past year and continued to do so since reporting third-quarter results. Earnings of 70 cents per share came in below last year's 97 cents but topped the Zacks Consensus Estimate by 9%. Third-quarter revenues slipped 25.5% year-over-year.
Cooper raised its full-year earnings guidance to a range of $2.35 to $2.45 per share.
Analysts polled by Zacks are calling for 2009 earnings of $2.42 per share, an increase from $2.30 over the past 2 months. For the following year, the Zacks Consensus Estimate of $2.70 per share was upped from the 2 months-ago level of $2.33.
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