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A. O. Smith Rewards Shareholders With 6% Dividend Increase
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In a shareholder-friendly move, A. O. Smith Corporation (AOS - Free Report) recently announced a hike in its dividend payout. The company increased its quarterly dividend by 6% to 34 cents per share (annually: $1.36). The new dividend will be paid out on Nov. 15, 2024, to shareholders of record as of Oct. 31.
The move underscores AOS’ sound financial health as it utilizes free cash flow to enhance its shareholders’ returns. The five-year compound annual growth rate of its’ dividend is about 8%. The company has increased its dividend consecutively for more than 30 years. Before this, it had hiked its dividend by 7% to 32 cents per share in October 2023.
Sound Capital-Allocation Strategies
Strong cash flows allow AOS to effectively deploy capital for rewarding its shareholders handsomely through dividend payments and share buybacks. In the first six months of 2024, the company paid dividends of $94.2 million, up 4% year over year. In the same period, it repurchased 1.8 million shares for approximately $153.2 million. With 3.7 million shares left to be repurchased under the existing authorization, the company’s board boosted the buyback program by another 2 million shares. For 2024, it expects to repurchase shares worth approximately $300 million.
AOS Stock’s Price Performance
Image Source: Zacks Investment Research
Over the past year, the Zacks Rank #3 (Hold) company has gained 28.4% compared with the industry’s 20.5% growth. It has been benefiting from strong demand for water heaters and commercial boilers in residential and commercial markets of North America. However, the company has been witnessing weakened consumer confidence and a challenged real estate market in China, which are likely to prove detrimental in the near term.
Key Picks
Some better-ranked companies from the same space are discussed below.
AZZ delivered a trailing four-quarter average earnings surprise of 29.9%. In the past 60 days, the Zacks Consensus Estimate for AZZ’s fiscal 2025 (ending February 2025) earnings has increased 0.2%.
Enersys (ENS - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 1.5%.
In the past 60 days, the consensus estimate for ENS’ fiscal 2025 (ending March 2025) earnings has increased 2.3%.
ESCO Technologies Inc. (ESE - Free Report) currently has a Zacks Rank of 2. In the past 60 days, the Zacks Consensus Estimate for ESE’s fiscal 2025 (ending September 2025) earnings has increased 2.1%.
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A. O. Smith Rewards Shareholders With 6% Dividend Increase
In a shareholder-friendly move, A. O. Smith Corporation (AOS - Free Report) recently announced a hike in its dividend payout. The company increased its quarterly dividend by 6% to 34 cents per share (annually: $1.36). The new dividend will be paid out on Nov. 15, 2024, to shareholders of record as of Oct. 31.
The move underscores AOS’ sound financial health as it utilizes free cash flow to enhance its shareholders’ returns. The five-year compound annual growth rate of its’ dividend is about 8%. The company has increased its dividend consecutively for more than 30 years. Before this, it had hiked its dividend by 7% to 32 cents per share in October 2023.
Sound Capital-Allocation Strategies
Strong cash flows allow AOS to effectively deploy capital for rewarding its shareholders handsomely through dividend payments and share buybacks. In the first six months of 2024, the company paid dividends of $94.2 million, up 4% year over year. In the same period, it repurchased 1.8 million shares for approximately $153.2 million. With 3.7 million shares left to be repurchased under the existing authorization, the company’s board boosted the buyback program by another 2 million shares. For 2024, it expects to repurchase shares worth approximately $300 million.
AOS Stock’s Price Performance
Image Source: Zacks Investment Research
Over the past year, the Zacks Rank #3 (Hold) company has gained 28.4% compared with the industry’s 20.5% growth. It has been benefiting from strong demand for water heaters and commercial boilers in residential and commercial markets of North America. However, the company has been witnessing weakened consumer confidence and a challenged real estate market in China, which are likely to prove detrimental in the near term.
Key Picks
Some better-ranked companies from the same space are discussed below.
AZZ Inc. (AZZ - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AZZ delivered a trailing four-quarter average earnings surprise of 29.9%. In the past 60 days, the Zacks Consensus Estimate for AZZ’s fiscal 2025 (ending February 2025) earnings has increased 0.2%.
Enersys (ENS - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 1.5%.
In the past 60 days, the consensus estimate for ENS’ fiscal 2025 (ending March 2025) earnings has increased 2.3%.
ESCO Technologies Inc. (ESE - Free Report) currently has a Zacks Rank of 2. In the past 60 days, the Zacks Consensus Estimate for ESE’s fiscal 2025 (ending September 2025) earnings has increased 2.1%.