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Dover (DOV) Hikes Dividend by 7%: Time to Buy the Stock?

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The industrial products maker, Dover Corporation (DOV - Free Report) announced that its board of directors has approved a hike in quarterly dividend.  The new dividend of 47 cents per share is 7% higher than the previous dividend of 44 cents. The increased dividend will be paid on Sep 15 to shareholders on record as of Aug 31, 2017. Based on the closing price of $86.87 per share on Aug 8, the stock has a dividend yield of 2.2%.

The dividend hike is in sync with the company’s plan to return operating cash to stockholders. This also highlights Dover’s financial strength.

Dover posted bookings of $2.02 billion in the second quarter, up 19.5% year over year. Backlog also increased to $1.33 billion at the end of the reported quarter from $1.09 billion at the year-ago quarter end.

In its second-quarter conference call, Dover raised its revenue and earnings per share (EPS) guidance for full-year 2017. The company guides adjusted EPS in the range of $4.23–$4.33 and expects full-year revenues to grow in the range of 12–14%.

Dover remains optimistic about its acquisition strategy and operating model. The company is also anticipated to gain from significant drilling activity, booming Printing & Identification platform, and robust hygienic and pharma markets.

Share price Performance

Year to date, Dover has outperformed the industry it belongs to. The company’s shares gained around 15.93% during this period compared with roughly 15.54% growth recorded by the industry.


Zacks Rank & Stocks to Consider

Currently, Dover carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the sector include Altra Industrial Motion Corp. , Terex Corporation (TEX - Free Report) and AGCO Corporation (AGCO - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Altra Industrial Motion has expected long-term growth rate of 8.00%.

Terex has expected long-term growth rate of 19.67%.

AGCO has expected long-term growth rate of 13.51%.

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