Patterson Companies Hikes Dividend - Analyst Blog

Patterson Companies Inc. PDCO announced a 25% rise in the regular quarterly cash dividend to 20 cents per share, from the prior level of 16 cents per share. The increased dividend will be payable on April 25, 2014, to shareholders of record on April 11, 2014.

Patterson Companies had been paying the dividend of 16 cents since the beginning of last year. In the first nine months of fiscal 2014, dividend payments moved up 49.3% to $65.3 million from $43.7 million in the same period of the prior fiscal year.

Along with the dividend announcement, Patterson Companies also announced the addition of two new members to its board of directors, bringing its total size to 10. The new members are Neil A. Schrimsher, president & chief executive officer of Applied Industrial Technologies, Inc. AIT and Sarena S. Lin, corporate vice president, strategy and business development, for Cargill, Inc.

Patterson Companies posted third-quarter fiscal 2014 adjusted earnings per share of 57 cents per share, which was up 9.6% from 52 cents in the year-ago quarter but were in line with the Zacks Consensus Estimate.

Adjusted net earnings rose 8.0% to $57.9 million from $53.6 million in the year-ago quarter. Revenues for the quarter grew 18.2% to $1,082.7 million, higher than the Zacks Consensus Estimate of $1,062 million.

Patterson Companies narrowed its EPS guidance to the range of $2.13–$2.20 from $2.13–$2.24 for fiscal 2014, which includes a 3–4 cents contribution from the NVS acquisition. However, the outlook does not include restructuring charges of 12 cents. The current Zacks Consensus Estimate for fiscal 2014 EPS of $2.16 lies within the guided range.

Currently, Patterson Companies carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the medical/dental supplies industry that worth a look include Align Technology ALGN and Becton, Dickinson and Company BDX. Both of them carry a Zacks Rank #2 (Buy).