Submitted: November 10, 2010
There are few dividend records more impressive than that of industrial giant DuPont (DD
Founded in 1802, DuPont (DD
) has delivered 425 consecutive dividends with the declaration of its third quarter dividend for 2010. It has maintained this record since its first dividend in the fourth quarter of 1904.
The company operates in 80 countries, offering a wide range of products and services for a variety of industries including agriculture, nutrition, electronics, communications, safety and protection, home and construction and transportation.
) trades on a price to earnings multiple of 14 times earnings and offers a dividend yield of 3.5%.
Despite a weaker performance from its pharmaceutical business unit, the company saw sales of $7bn, up 17% on the previous financial year in its third quarter. Stellar performances from its Safety & Protection business which was up 31% and Electronics & Communications, which rose 24%, were key performers in the quarter.
For the quarter DuPont (DD
) earned $367 million, or 40 cents per share, compared with $409 million, or 45 cents per share, for the same quarter in the previous year. DuPont’s (DD
) market focus and science-based innovations helped drive outstanding sales growth, with all business segments and regions contributing.
A key feature of these results was the diversified nature of the DuPont (DD
) businesses and how this has carried the company through a rocky couple of years in the global economy. The diversified nature of its business and its market-leading positions in a variety of industries justifies its earnings multiple. This has reflected in the share price where the company stock has risen from $32 a share a year ago to now trade around $48.
One of the key factors when assessing DuPont (DD
) is its free cash flow. For the full-year the company indicated that this figure will be about $1.7bn. This kind of cash generation is likely to see it continue to deliver solid dividends to shareholders for years to come.
Commenting on the outlook for the group, the company noted that earnings would be above previous guidance. DuPont (DD
) expects full-year earnings to be about $3.10 per share up on the previous guidance range of $2.90 to $3.05 per share.
The increased outlook reflects strong third quarter results and expectations for sustained demand in key global markets, continued pricing momentum and benefits from ongoing productivity. The outlook also assumes Pharmaceuticals full-year pre-tax income will be about $480 million.
There is little arguing with a company which has delivered 425 consecutive dividends and for this reason the company remains a favorite of dividend investors.