IDEX Corporation (NYSE: IEX) rewarded its shareholders with a hike of 11% in its quarterly dividend rate on Friday. This marks the company’s 110th consecutive increase so far.
The announcement is in sync with the company’s commitment to increasing shareholders’ value. Shares of IDEX closed at $188.06 on Friday.
IDEX is a specialist in health and science technologies, fluid and metering technologies, and fire and safety products. Its footprints are solid in industrial, pharma, food, chemical, life sciences, energy, agriculture, and other end markets. Its headquarters is located in Northbrook, IL.
Inside the Headline
The company’s board of directors approved the 11%, or $0.06 per share, increase in the quarterly dividend rate. The revised rate is now at $0.60 per share, up from the previous rate of $0.54 per share, and will be disbursed on May 27.
All shareholders in the company’s record as of May 17 will be eligible to receive the revised quarterly dividend payment.
On an annualized basis, IDEX’s dividend rate is now at $2.40 per share, up from the previous rate of $2.16 per share.
Sound Capital Deployment Policy
In the first quarter of 2022, the company distributed dividends totaling $41.4 million, higher compared with the $38.1 million paid in the year-ago quarter. Also, the company rewarded its shareholders by buying back 148 thousand shares for $26.3 million. In the year-ago quarter, the company had refrained from repurchasing any shares.
In addition to rewarding shareholders, IDEX uses its capital for making acquisitions, building organic growth opportunities, and capital expenditure.
In the first quarter, the company’s capital spending was $16.1 million and its acquisitions (net of cash acquired) were worth $114.7 million.
Such a capital allocation policy is possible on the back of a solid cash position and healthy financial prospects.
Exiting the first quarter of 2022, IDEX had cash and cash equivalents of $733.2 million, while its cash flow from operations was at $79.7 million in the quarter.
In 2022, IDEX anticipates organic sales to grow within the 6%-8% range, higher compared with the previous expectation of 5%-8%. Adjusted earnings per share are projected to be $7.50-$7.63 per share, up from the earlier projection of $7.33-$7.63 per share.
For the second quarter, organic sales growth is expected to be 8%-9%, and adjusted earnings per share to be $1.85-$1.90 per share.
Stock Rating
On May 4, Oppenheimer’s analyst Bryan Blair reiterated a Hold rating on IDEX.
A few days back, Deane Dray of RBC Capital reiterated a Buy rating on IDEX while increasing the price target to $238 (26.56% upside potential) from $234.
Overall, the Street has a Moderate Buy consensus rating based on five Buys and three Holds. Also, IEX’s price forecast of $221.33 suggests 17.69% upside from current levels.
Over the past year, shares of IDEX have decreased 17.1%.
Crowd Wisdom
TipRanks’ Stock Investors tool reveals that investor sentiments are currently Very Positive for IDEX, as 1.1% of investors on TipRanks increased their exposure to the stock in the past seven days.
Conclusion
Such a shareholders-friendly capital deployment policy is expected to work well for IDEX in enhancing its investment appeal.
Further, considering the company’s rewards to shareholders and its solid financial prospects, income investors may find IDEX to be a strategic fit for their portfolio.
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