Goodrich Corporation (GR) hiked its quarterly dividend by 7% to 29 cents per share from the current level of 27 cents on its common stock. The dividend is payable December 30, 2010 to shareholders of record as of December 1, 2010.
The company has always focused on rewarding its shareholders by returning a substantial portion of its free cash flows through incremental dividend over the years. The last quarterly dividend hike in October 2009 was also an impressive 8% from $0.25 to $0.27.
Goodrich had a strong balance sheet among its peers with a low long-term debt-to-capitalization of 40.0% as of fiscal-end 2009 (Zacks industry average was 88.3%).
The company continues to be a strong cash generator with operating cash flows of approximately $253 million during the first half of 2010. The company ended the first half of 2010 with cash and cash equivalents of $866.4 million, and a $500 million revolving credit facility. Total long term debt was approximately $2 billion with only $1.1 million slated for maturity in fiscal 2010 and $0.9 million maturing in fiscal 2011.
Goodrich is bullish about its future performance expecting a push from higher large-size commercial airplane production, improving trends from aftermarket sales and induction of The Boeing Company’s (BA) 787 series airplane. The company’s fortunes are tied to the cyclical commercial aerospace market, with its sales to Airbus and Boeing being 17% and 16%, respectively of its total sales in fiscal 2009.
Based in Charlotte, North Carolina, Goodrich supplies components, systems and services to the commercial and general aviation airplane markets. The company also supplies systems and products to the global defense and space markets. Businesses include manufacturing, service and sales, which are carried out in locations throughout the world.
Goodrich’s products and services are sold in North America, Europe and Asia. Goodrich operates three business segments – Actuation and Landing Systems, Nacelles and Interior Systems and Electronic Systems.
Goodrich Corporation’s geographically diverse customer mix, strong balance sheet, incremental dividend-paying history, ongoing share repurchase program and a relatively cheap earnings-based valuation support our bullish outlook for the company.
However, this is offset by the depressed fortunes of the business jet market, high research and development overheads and regulatory risks. We currently have a market Neutral recommendation on the Zacks #3 Rank (Hold) Goodrich stock.
GOODRICH CORP (GR): Free Stock Analysis Report
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