Installed Building Initiates Quarterly Dividend; Street Is Bullish

Installed Building Products initiated its first dividend payout with a quarterly cash dividend of $0.30 per share. Shares of the installation contractor declined 2.6% to close at $123.32 on Feb. 22.

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Installed Building Products (IBP) announced that the first quarterly dividend will be paid on March 31, to shareholders of record as of March 15.

The company’s annual dividend of $1.20 per share now reflects a dividend yield of 0.97%.

Additionally, the company’s board of directors has decided to pay a variable dividend annually in the first quarter of every year beginning in 2022. The amount of variable dividends will depend on the cash flow generated by operations and certain other factors.

Installed Building Products also increased its existing share repurchase program to $100 million and extended it to March 1, 2022. The company had $26.7 million of shares available under its existing share repurchase program announced in Nov. 2018.

Installed Building Products CEO Jeff Edwards commented, “Since our IPO seven years ago, we have focused on creating sustainable value for our shareholders.”

“We will continue to prioritize profitable growth through our proven strategy of acquiring well-run installers of insulation and complementary building products, and we remain committed to targeting approximately $100.0 million of acquired revenue annually,” he added. (See IBP stock analysis on TipRanks)

The company is scheduled to report 4Q and 2020 results on Feb. 24.

On Feb. 10, JPMorgan analyst Michael Rehaut initiated a Buy rating on the stock with a price target of $140 (13.5% upside potential). The analyst views the company “favorably from a fundamental standpoint, led by compelling growth opportunities over at least the next two years, both on an organic and inorganic basis.”

The consensus rating among analysts is a Strong Buy based on 4 unanimous Buys. The average analyst price target stands at $132.50 and implies upside potential of more than 7% over the next 12 months. Shares have gained almost 23% over the past three months.

Additionally, Installed Building Products scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.