Dun & Bradstreet (DNB) recently reported fourth quarter earnings per share of $1.92, beating the Zacks Consensus Estimate by 4 cents.
The company also gave 2011 guidance of 6% to 10% EPS growth. This prompted analysts to revise their estimates higher, sending the stock to a Zacks #2 Rank (Buy).
D&B has also been rewarding its shareholders through stock buybacks and dividend increases. It currently yields 1.6%.
Company Description
The Dun & Bradstreet Corporation provides its customers with business information. The company provides solutions to mitigate credit risk, and to increase revenue, cash flow, and profitability.
Fourth Quarter Results
D&B reported fourth quarter EPS of $1.92, beating the Zacks Consensus Estimate by 2%. It was a 10% increase over the same quarter in 2009.
Core revenue was up 7% year-over-year driven by an 8% increase in Risk Management Solutions. The Sales & Marketing Solutions division was up 6%.
Meanwhile, operating income improved 7%.
Outlook
The company stated in its latest earnings release that it expects 2011 EPS growth of 6% to 10%, which comes out to $6.00 to $6.23 per share.
The Zacks Consensus Estimate is toward the lower end of guidance at $6.01, equating to 6% EPS growth. The 2012 estimate is currently $6.91, or 15% higher than 2011.
It is a Zacks #2 Rank (Buy) stock.
Rewarding Shareholders
D&B generated $249 million in free cash flow in 2010 and expects to generate between $240 million and $270 million in 2011. The company has been using its free cash flow to return value to shareholders through stock repurchases and a dividend increase.
For instance, D&B recently announced that it was raising its quarterly dividend from 35 cents per share to 36 cents. This marks the 4th consecutive year of a dividend hike. It currently yields 1.6%.
The company also spent $134.8 million in 2010 buying back approximately 1.8 million shares.
Shares of DNB have jumped nearly 30% since September 1.
Valuation has remained in-check, however, with shares trading at 14.2x forward earnings, a discount to the industry average of 20.0x.
D&B is headquartered in Short Hills, New Jersey and has a market cap of $4.3 billion.
Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.
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