Ametek Hikes Dividend by 50% - Analyst Blog

Ametek Inc. AME has recently announced a quarterly dividend hike of 3 cents thereby increasing it to 9 cents per share. This translates into a 50% increase from the prior dividend.

The increased dividend will be paid on Jun 30, 2014, to stockholders of record as of Jun 16. Prior to this announcement, Ametek had been paying a quarterly dividend of 6 cents per share.

Ametek's strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, share repurchases and strategic acquisitions. During the last-concluded quarter, cash and cash equivalents totaled $265.3 million at quarter-end. The debt to total capital ratio was 30.1%. We remain encouraged by Ametek's strong cash position which enables it to service its long-term debts.

Dividend hikes ensure higher returns from the stock thereby inspiring investors' loyalty. The strength of Ametek's business model is reflected in its strong cash generation capabilities and commitment to return value to shareholders.

Ametek manufactures and sells electronic instruments and electromechanical devices. The company reported a decent first quarter with both earnings and revenues increasing year over year. Revenues of $975.3 million were up 10% year over year due to strong demand in the Electronic as well as Electromechanical segments. Earnings of 57 cents exceeded the Zacks Consensus Estimate by a penny.

Currently, Ametek has a Zacks Rank #2 (Buy). Stocks that have been performing well and are worth considering include Universal Electronics UEIC, Agilent Technologies A and Garmin Ltd. GRMN. Universal Electronics sports a Zacks Rank #1 (Strong Buy), while Agilent Technologies and Garmin have the same Zacks Rank as Ametek.