Up to date on October twenty sixth, 2024 by Felix Martinez
The Dividend Kings encompass corporations which have raised their dividends for at the least 50 years in a row. Over the many years, many of those corporations have change into enormous multinational firms, however not all.
You possibly can see the total listing of all 53 Dividend Kings right here.
We created a full listing of all Dividend Kings, together with essential monetary metrics like price-to-earnings ratios and dividend yields. You possibly can obtain your copy of the Dividend Kings listing by clicking on the hyperlink under:
Dover Company (DOV) has raised its dividend for 68 consecutive years, one of many longest dividend progress streaks within the inventory market.
The corporate has achieved an distinctive dividend progress file due to its sturdy enterprise mannequin, first rate resilience to recessions, and conservative payout ratio, which supplies a large margin of security throughout recessions.
Dover is a time-tested dividend progress firm. This text will look at its future prospects in higher element.
Enterprise Overview
Dover is a diversified international industrial producer that gives its prospects tools and parts, consumable provides, aftermarket elements, software program, and digital options.
It has annual revenues of about $8.4 billion, with simply over half of its revenues generated within the U.S., and operates in 5 segments: Engineered Programs, Fueling Options, Pumps & Course of Options, Imaging & Identification, and Refrigeration & Meals Tools.
The previous few years have been troublesome for Dover, because the coronavirus pandemic brought on a chronic enterprise deterioration. As its prospects are primarily industrial producers, they have been considerably impacted by the worldwide recession attributable to the pandemic.
Nevertheless, Dover and its prospects rebounded from the pandemic, and Dover is again to progress.
Supply: Investor Presentation
Progress Prospects
Dover has pursued progress by increasing its buyer base and thru bolt-on acquisitions. It routinely executes a collection of bolt-on acquisitions, together with an occasional divestment, to reshape its portfolio and maximize its long-term progress.
Supply: Investor Presentation
The administration workforce is continually centered on delivering essentially the most worth to shareholders by way of portfolio transformation, and it has usually been profitable. At the moment, Dover is a extremely diversified industrial firm with a horny progress profile.
As well as, Dover can also be more likely to improve its earnings per share by way of opportunistic share repurchases. We anticipate Dover to generate annual earnings-per-share progress of 8% over the following 5 years. Progress ought to be pushed primarily by income will increase, with a further enhance from margin enlargement and share repurchases.
Aggressive Benefits & Recession Efficiency
Dover is a producer of commercial tools, and a few traders might imagine that the corporate has no moat in its enterprise as a result of little room for differentiation. Nevertheless, the corporate presents extremely engineered merchandise, that are vital to its prospects. It’s also uneconomical for its prospects to change to a different provider as a result of the danger of decrease efficiency is materials.
Due to this fact, Dover basically operates in area of interest markets, which provide the corporate a major aggressive benefit. This aggressive benefit helps clarify Dover’s constant long-term progress trajectory.
Then again, Dover is susceptible to recessions as a result of its reliance on industrial prospects. Within the Nice Recession, its earnings per share have been as follows:
- 2007 earnings-per-share of $3.22
- 2008 earnings-per-share of $3.67 (14% improve)
- 2009 earnings-per-share of $2.00 (45% decline)
- 2010 earnings-per-share of $3.48 (74% improve)
Dover survived the Nice Recession with only one yr of decline in earnings per share, and the corporate virtually totally recovered from the recession in 2010. That efficiency was actually spectacular. The oil trade’s downturn additionally impacts Dover during times of weak oil costs.
To mitigate its publicity to grease costs, Dover spun off its power division, Apergy, in 2018. This firm now trades as ChampionX Company (CHX).
Given the impression of recessions and falling oil costs, it’s extremely spectacular that Dover has elevated its dividend every year for over six many years. One motive for that is the corporate’s coverage of preserving its payout ratio round 30%. This coverage supplies a large margin of security throughout tough financial durations. The payout ratio is predicted to be round 22% of earnings-per-share for 2024, which means the dividend is very safe.
Due to its low payout ratio, resilience to recessions, and wholesome stability sheet, Dover ought to proceed to lift its dividend for a few years.
Valuation & Anticipated Returns
Dover is predicted to generate earnings-per-share of $9.13 for 2024. Which means the inventory trades for a price-to-earnings ratio of 20.6 instances this yr’s anticipated EPS, which is above the truthful worth estimate of 17. That means a -4.0% annual headwind to complete returns from valuation compression.
Including 8% anticipated annual earnings-per-share progress and the 1.1% dividend yield, complete returns are anticipated to succeed in 5.1%. This places Dover inventory within the maintain ranking territory.
Closing Ideas
Dover has a protracted dividend progress file, with 68 consecutive years of dividend raises. That is a formidable achievement, notably given the dependence of the corporate on industrial prospects, who are inclined to wrestle throughout recessions.
Dover has persistently grown its earnings per share through the years, primarily due to a collection of bolt-on acquisitions. As a result of firm’s income and earnings progress, the inventory has generated sturdy complete returns to shareholders.
Dover inventory presently has a maintain ranking with its 5.1%+ projected complete returns.
The next articles comprise shares with very lengthy dividend or company histories, ripe for choice for dividend progress traders:
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to [email protected].