Dividend King Dover Corporation raises forecasts
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Although still affected by global supply chain issues, early cycle companies like Dover Society (NYSE: DOV) are better positioned for the tightening of the supply chain. The supply chain crisis is supported by several trends, including low inventory system-wide. The low inventory throughout the system is causing manufacturers to search for materials to craft new widgets, which brings us back to the point. Dover Corporation manufactures equipment and components for use in a wide variety of industrial, scientific, manufacturing and commercial / residential refrigeration applications, so it is in high demand in all of its end markets. Take-out, Dover Corporation’s business is booming and is only limited by what it can produce and deliver.
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“During the quarter, we demonstrated the strength of our portfolio with revenue growth and new orders in our five operating segments. We have improved our margins year over year despite the well-publicized supply chain, logistics and workforce availability issues that negatively impacted the schedule. shipping and margin performance across several businesses, including our refrigeration and food equipment and engineered products segments, ”said Dover Corporation. CEO Richard J. Tobin.
Dover Corporation Increases Revenue and Expands Margins
Dover Corporation manages its supply chain issues with aplomb and has been able to generate revenues and profits above expectations. The company reported consolidated net sales of $ 2.01 billion, a gain of 14.9% from last year and beat the Marketbeat.com consensus estimate of 100 basis points. The company said it sees strength across all segments and expects that strength to continue into at least the fourth quarter.
Going down the report, results were not level across the network, but overall the company was able to improve its operating margins by 165 basis points. The 13.08% operating margin drove a 31% increase in GAAP earnings which exceeded the consensus of $ 0.18 and includes an investment in a capacity expansion that will increase revenues and profits for the next few quarters. On an adjusted basis, the $ 1.98 was also strong and broke the consensus by $ 0.13.
Going forward, the company expects the strength to continue and has increased its forecast accordingly. The new forecast of $ 7.45 to $ 7.50 in adjusted earnings compares well with the previous consensus estimate of $ 7.42 and stocks are moving higher.
“More positively, our high backlog levels provide beneficial near-term visibility for the remainder of the year and through 2022. As a result, we are raising our EPS guidance for the full year,” Tobin concluded. .
Dover Corporation is a king of dividend kings
Dover Corporation is a King of dividends with one of the best dividends in the group. The company has been increasing the dividend consecutively for 65 years and still pays only 27% of its profits. This is a testament to both the company’s profit growth and management and set it up for another 65 years of growth. The distribution is a little weak at 1.2% but is at least in line with the general market average. The cast has grown at an 8% CAGR over the past five years, so we don’t expect huge double-digit increases, but solid mid-to-high single-digit increases are on the table. As for the balance sheet, the company has a little debt but the balance sheet is also very solid, close to a fortress.
Technical outlook: Dover Corporation to set new all-time record
Shares of Dover Corporation are up more than 2% following the increase in earnings report and forecast and are on track to set a new all-time high. Price action has encountered some resistance near the current all-time high, but momentum is bullish, strong and growing. In our opinion, the stock will test and set a new all-time high fairly soon and may continue to rise. A break above the $ 176 level would be bullish and could push the stock up into a range of $ 200.