The major stock market indexes rose yesterday as investors looked forward to the Fed’s monetary policy tightening to control galloping inflation. The Federal Reserve is expected to raise interest rates aggressively this year. The central bank is also expected to announce a plan to cut its roughly $9 trillion balance sheet by $95 billion per month, beginning June.
However, the Ukraine-Russia war and extended COVID-19 lockdowns in China will likely keep the stock market under pressure in the near term. Therefore, investors should consider investing in stocks with stable dividend payouts to secure a steady income stream.
Genuine Parts Company (GPC), Nordson Corporation (NDSN), and ABM Industries Incorporated (ABM) have been paying dividends for at least 50 consecutive years. So, we think investors could consider betting on these stocks considering their solid fundamentals and ability to provide stable dividend income.
Genuine Parts Company (GPC)
GPC in Atlanta, Ga., distributes automotive replacement parts for hybrid and electric vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, marine equipment, heavy-duty equipment, and industrial parts and materials. Automotive Parts Group and Industrial Parts Group are the company’s two operational segments.
Last month, GPC announced an acquisition of its European Automotive business. Effective April 12, 2022, Alliance Automotive Group (AAG), the company's wholly-owned automotive distribution company based in London, acquired Lausan Group (Lausan). Paul Donahue, Chairman and Chief Executive Officer of GPC, said, "With our entry into Spain and Portugal, we expect to further strengthen Lausan's market-leading position by capitalizing on our European scale and purchasing expertise, as well as leveraging the roll-out of our NAPA brand across this region.”
GPC declared a $0.90 quarterly dividend on April 28, 2022, payable on July 1, 2022. Its $3.58 annual dividend yields 2.7% at the current share price. Also, it has a four-year average dividend yield of 3%. Its dividend payouts have increased at a 4.8% CAGR over the past five years.
GPC's net sales increased 18.6% year-over-year to $5.29 billion for the first quarter ending March 31, 2022. Its gross profit increased 18.5% from its year-ago value to $1.83 billion, while its adjusted net income grew 22% from its year-ago value to $265.65 million. The company's adjusted EPS rose 24% from its prior-year quarter to $1.86.
Analysts expect GPC's revenue to increase 10.9% year-over-year to $5.30 billion for the second quarter, ending June 30, 2022. The company's EPS is expected to grow 16.3% year-over-year to $2.02 for the same period. In addition, it has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 3.6% over the past year and 4.6% over the past month.
GPC's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock also has a B grade for Quality, Growth, and Stability. Within the Auto Parts Industry, it is ranked #2 of 70 stocks.
To see additional POWR Ratings for Value, Sentiment, and Momentum for GPC, click here.
Nordson Corporation (NDSN)
NDSN engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide. It has two operational segments, Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS). NDSN is headquartered in Westlake, Ohio.
NDSN paid a $0.51 quarterly dividend on March 8, 2022. Its $2.04 annual dividend yields 0.9% at its current share price. It has a four-year average dividend yield of 0.9%. In addition, the company's dividend payouts have increased at a 12.8% CAGR over the past five years.
For the first quarter ended Jan. 31, 2022, NDSN's sales increased 15.7% year-over-year to $609.17 million. Its non-GAAP operating profit grew 44.4% from its year-ago value to $157.42 million, while its non-GAAP net income improved 57% from its prior-year quarter to $121.65 million. The company's non-GAAP EPS amounted to $2.07, up 57% from its year-ago value.
The $2.29 consensus EPS estimate for the second quarter, ending April 30, 2022, represents a 7.9% improvement year-over-year. Analysts expect its revenue to increase 9.4% year-over-year to $644.90 million for the same period. Also, it has an impressive earnings surprise history: it surpassed the consensus EPS estimates in three of the trailing four quarters. The company's shares have surged 3.8% over the past year.
NDSN's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. NDSN is also rated an A grade for Quality and a B for Sentiment and Stability. Within the B-rated Industrial - Machinery industry, it is ranked #18 of 77 stocks.
In total, we rate NDSN on eight distinct levels. To see additional POWR Ratings for Growth, Value, and Momentum for NDSN, click here.
Click here to check out our Industrial Sector Report for 2022
ABM Industries Incorporated (ABM)
ABM provides integrated facility solutions in the United States and internationally. Business and Industry, Technology and Manufacturing, Education, Aviation, and Technical Solutions are the company’s operational segments of the New York City-based company. It provides janitorial, facilities engineering, parking, custodial, landscaping and ground, mechanical and electrical services; and vehicle maintenance and other services to rental car providers.
In an all-cash transaction last month, ABM acquired Momentum Support ("Momentum"), headquartered in Dublin, Ireland. Momentum is a renowned independent provider of facility services, primarily janitorial, across Ireland and Northern Ireland. Momentum generated annual revenue of approximately $70 million in 2021 and has a workforce of 2,300. This acquisition reflects ABM's ELEVATE strategy to grow via strategic acquisitions that expand the company's footprint in attractive geographies and end markets.
ABM paid a $0.20 quarterly dividend on May 2, 2022. Its $0.78 annual dividend yields 1.7% at its current share price. It has a 1.9% four-year average dividend yield. In addition, the company's dividend payouts have increased at a 2.8% CAGR over the past five years.
During the first quarter ending Jan. 31, 2022, ABM's revenue increased 29.7% year-over-year to $1.94 billion. Its operating profit amounted to $106.00 million, while its adjusted net income came in at $64.4 million. Its adjusted EPS stood at $0.94 over the period.
The $0.84 consensus EPS estimate for the second quarter, ending April 30, 2022, represents a 2.7% improvement year-over-year. Analysts expect revenue to increase 25.5% year-over-year to $1.88 billion for the same period. Furthermore, it has an impressive earnings surprise history, it surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock has soared 15.8% in price year-to-date and 14.5% over the past three months.
ABM's strong fundamentals are reflected in its POWR Ratings. The stock has a B grade for Growth and Value. In the B-rated Outsourcing - Business Services industry, it is ranked #17 of 44 stocks.
Click here to see the additional POWR Ratings for ABM (Stability, Quality, Momentum, and Sentiment).
GPC shares were trading at $135.13 per share on Wednesday afternoon, up $3.36 (+2.55%). Year-to-date, GPC has declined -2.92%, versus a -9.50% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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