Engineered products maker Dover (DOV), part of the IBD Big Cap 20, is among the leading dividend stocks.
The stock is in the machinery and general industrial group, which ranks a lofty No. 18 among IBD’s 197 industry groups.
And Dover stock is building a long cup with handle with a 170.76 buy point.
Dividend Stock’s Yield Is Small
Its Composite Rating is nearly perfect at 96. The EPS Rating of 93 reflects an uneven record of sales and earnings growth over the past seven quarters.
Earnings per share grew 82%, 24%, 15%, 5%, 4%, 14% and 21% while sales increased 36%, 15%, 12%, 10%, 6%, 7% and 8%, according to MarketSmith.
It will pay a quarterly dividend of 50.5 cents per share on March 15 for shareholders of record as of Feb. 28. The stock is a strong dividend play and has been returning capital to shareholders through dividends over 60 years. But the annualized yield is a modest 1.3%.
For the full year, the company expects sales growth of 3% to 5% and earnings per share of $8.85 to $9.05. It earned $8.45 a share in 2022.
The Downers Grove, Ill.-based company makes engineered products for vehicle service, industrial automation, aerospace, defense and other industries. It also provides equipment for safe transport of traditional and clean fuels.
Its marking and coding tools and printing equipment are used in consumer goods, pharmaceutical, apparel, manufacturing and other companies. It also makes pumps and flow meters and refrigeration systems for industrial and home climate control applications.
Dover’s Acquisitions
The company has a long record of acquisitions that have contributed to its diverse portfolio. In December, it bought the German company Witte Pumps & Technology, which makes precision gear pumps for the chemical, pharma, plastic and food and beverage industries.
In May, the company entered into an agreement to buy a designer and manufacturer of high-precision flow-measurement and control instruments, Malema Engineering. The acquisition increased Dover’s capabilities in the biotech, semiconductor and industrial sectors.
According to reports, analysts have a median price target of 165 for the stock with a high at 185 and a low of 141. The median target indicates 10% growth for the stock from its current price.
Apart from interest from fund managers and its strong dividend payout, the current market conditions may make Dover an attractive stock.
As rising interest rates pressure growth and cyclical stocks, dividend leaders are back in focus. Dover’s diversified product and customer base are also points in its favor. According to the CAN SLIM stock picking methodology, the “M” stands for market conditions.
Exchange traded funds own the stock as well. The Proshares S&P 500 Dividend Aristocrats Fund (NOBL) and the SPDR S&P 500 Dividend ETF (SDY) hold shares of Dover.
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