In a bid to reward shareholders, Patrick Industries, Inc. PATK announced a 9.1% hike in its quarterly dividend.
On Nov. 14, Patrick’s board of directors increased the quarterly cash dividend to 60 cents per share from 55 cents paid earlier. The dividend will be payable on Dec. 9, 2024, to its shareholders of record as of the close of business on Nov. 25.
Regular Enhancement of Shareholder Value
The company has been driving shareholder value through regular dividend hikes, share repurchase programs and reinvestment in the business. This solid capital allocation strategy — a testimony to the company’s stability amid the prevailing macroeconomic woes — drives long-term sustainable growth and shareholders’ value.
Since December 2019, Patrick's board of directors adopted a regular quarterly cash dividend policy. It paid cash dividends of $1.90 and $1.44 per share, or $42.1 million and $32.9 million, in 2023 and 2022, respectively. In the first nine months of 2024, the company paid $37.1 million dividend.
PATK is also highly active on the buyback front. In 2023, the company repurchased $18.8 million worth of shares under the repurchase authorization. Although in the past nine months of 2024, PATK did not repurchase any share, it had the remaining authorization of $77.6 million on Sept. 29, 2024.
Investors always prefer a return-generating stock. A high-dividend-yielding one is highly coveted. Stockholders are always looking for companies with a track record of consistent and incremental dividend payments.
Can Patrick Sustain Dividend Hikes Streak?
In the past year, PATK’s shares have gained 50.5%, which surpassed the Zacks Building Products - Mobile Homes and RV Builders industry’s 31.3% rise, as well as the broader Construction sector's 40.6% increase and the Zacks S&P 500 Index's 29.3% growth.
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Patrick pivots around strategies that ensure operational excellence, an increase in customer reach and long-term growth. Its primary focus comprises accretive acquisitions, strategic diversification and efficient capital allocation.
Patrick’s focus on strategic diversification, primarily across leisure lifestyle and housing markets, has positioned it to deliver growth in the gross margin in this challenging economic scenario. Also, the company’s disciplined capital allocation strategy allows it to maintain a stable balance between offering shareholder value and strategic business growth.
PATK’s Zacks Rank and Stocks to Consider
Patrick currently carries a Zacks Rank #4 (Sell).
Some better-ranked Construction stocks have been discussed below:
EMCOR Group Inc. EME currently sporting a Zacks Rank #1 (Strong Buy). Also, 2024 and 2025 earnings estimates have increased to $20.75 per share (from $19.50) and $22.22 (from $21.50) over the past 30 days, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings for 2024 and 2025 are expected to grow 55.6% and 7.2%, respectively. EME surpassed earnings estimates in all the trailing four quarters, with the average surprise being 32.3%.
MasTec, Inc. MTZ currently sporting a Zacks Rank #1. Earnings estimates for 2024 and 2025 have increased to $3.63 per share (from $3.01) and $5.28 per share (from $4.48) over the past 30 days, respectively.
Earnings for 2024 and 2025 are expected to grow 84.3% and 45.5%, respectively. MTZ surpassed earnings estimates in all the trailing four quarters, with the average surprise being 40.2%.
Louisiana-Pacific Corporation LPX presently sports a Zacks Rank of 1. LPX delivered a trailing four-quarter earnings surprise of 30.7%, on average. The stock has risen 82.5% in the past year.
The Zacks Consensus Estimate for LPX’s 2024 sales and EPS indicates improvements of 12.7% and 72.1%, respectively, from a year ago.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
