Ashland Beefs Up Dividend - Analyst Blog
16 Mai 2013 - 1:00PM
Zacks
Ashland Inc. (ASH)
remains committed to deliver incremental value to its shareholders.
The specialty chemicals maker, best known for its Valvoline
automotive lubricants, said that its Board has approved a roughly
51% raise in its quarterly dividend to 34 cents per share from 22.5
cents. Annualized, this represents a payout of $1.36 per share. The
revised dividend is payable on Jun 15, 2013, to shareholders of
record as of May 31, 2013.
Separately, Ashland’s Board approved a new share repurchase program
worth $600 million. The new authorization, which is effective
immediately, replaces the company’s earlier repurchase program
which had roughly $330 million remaining. Around $150 million of
shares are expected to be bought back through an accelerated
repurchase program to be initiated on or before May 31, 2013. The
new buyback program will expire on Dec 31, 2014.
The twin announcement reflects Ashland’s ability to generate strong
cash flows. Its cash flow from operating activities zoomed roughly
eight-and-a-half fold year over year in the first-half of fiscal
2013.
Ashland makes nickel and cobalt-based alloys in sheet, coil and
plate forms. Its Consumer Markets segment markets Valvoline, the
world’s first lubricating oil. It also operates the Valvoline
Instant Oil Change, the nation’s second-largest franchised
quick-lube chain. Ashland offers specialty chemicals in more than
100 countries.
Ashland, last month, reported second-quarter fiscal 2013 (ended Mar
31, 2013) adjusted earnings (excluding one-time items) from
continuing operation of $1.78 per share, outshining the Zacks
Consensus Estimate of $1.56.
Profit from continuing operations, as reported, fell roughly 39%
year over year to $55 million of 68 cents a share. Revenues fell 5%
year over year to $1,974 million, missing the Zacks Consensus
Estimate of $2,057 million. The company was challenged by weakness
across a number of key regions, especially Europe. It witnessed
lower sales across each of its business segments in the quarter on
lower demand.
Ashland currently carries a short-term Zacks Rank #5 (Strong
Sell).
Other companies in the chemical industry that are worth considering
include Shin-Etsu Chemical Co., Ltd. (SHECY),
Methanex Corp. (MEOH) and Celanese
Corporation (CE). All of them retain a Zacks Rank #1
(Strong Buy).
ASHLAND INC (ASH): Free Stock Analysis Report
CELANESE CP-A (CE): Free Stock Analysis Report
METHANEX CORP (MEOH): Free Stock Analysis Report
SHIN-ETSU CHEM (SHECY): Get Free Report
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