Pool Corp. Set to Return Shareholder Wealth - Analyst Blog

Pool Corp. POOL recently authorized an additional stock repurchase program and increased its dividend, thereby maintaining the trend of returning wealth to its shareholders from time to time, depending on market conditions. Share price of the company increased 2.3% in response.

Under this current share repurchase program, the company is authorized to repurchase up to $100.0 million additional common stock. Last year in November also, the company authorized share buyback of $100.0 million. The share buyback authorization reflects the company's confidence in its fundamentals.

At the same time, the share buyback will help the company to reduce outstanding share count, thereby increasing earnings per share and return on equity. The company has repurchased shares worth $94.3 million, $77.0 million and $71.0 million in 2013, 2012 and 2011, respectively.

Apart from share buyback activity, there is a dividend distribution program in place. The company increased its dividend by 16% to 22 cents per share from 19 cents. This translates to an annualized dividend of 88 cents per share.

The increased quarterly dividend is payable on Jun 4, 2014 to stockholders of record as of May 21, 2014. Since 2004, the company has raised its dividend nine times. The company last made an increase of 19.0% in May 2013.

We appreciate Pool's efforts to consistently enhance long-term shareholder value even in times of an economic downturn. We believe that an increase in share buyback authorization and dividend payment affirm the company's optimistic outlook and growth prospects.

Recently this Zacks Rank #3 (Hold) company posted mixed first quarter 2014 results with earnings missing the Zacks Consensus Estimate while revenues beating the same.

Other Stocks to Consider

Some better-ranked stocks in the leisure industry include Malibu Boats, Inc. MBUU, Smith & Wesson Holding Corp. SWHC and Wynn Resorts Ltd. WYNN. All these stocks carry a Zacks Rank #2 (Buy).   

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