In a shareholder-friendly move, Graco Inc. GGG announced a 7.8% hike in its dividend payout. The move underscores the company’s sound financial health as it utilizes free cash flow to enhance shareholders’ returns.
 
Graco raised its quarterly cash dividend to 27.5 cents per share ($1.10 annually) from 25.5 cents. The new dividend will be paid to shareholders on Feb. 5, 2025, of record as of Jan. 20, 2025. Before this, it had hiked its quarterly dividend by 8.5% to 25.5 cents per share in December 2023.

Strong cash flow generation capacity supports GGG’s shareholder-friendly activities. It generated net cash of $436.5 million from operating activities in the first nine months of 2024. Exiting the third quarter, Graco had cash and cash equivalents of $764.5 million, higher than $538 million at the end of 2023.

In the first nine months of 2024, Graco paid out dividends worth $129 million to its shareholders, reflecting an increase of 8.7% year over year. Also, it repurchased shares worth $31.4 million in the same period.

Graco’s Zacks Rank & Price Performance

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Graco currently carries a Zacks Rank #4 (Sell). Shares of the company have gained 9.5% in the past three months compared with the industry‘s 15% growth.

A decline in demand for the company’s semiconductor, industrial lubrication and process transfer equipment products, owing to a weakness in the industrial sector, is hampering its performance of late. For 2024, GGG expects organic revenues to decline in the low single digits from the year-ago level.

The Zacks Consensus Estimate for 2024 earnings per share has decreased 3% to $2.89 in the past 60 days.

Stocks to Consider

Some better-ranked companies from the same space are discussed below.

Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has increased 8.4%.

RBC Bearings Incorporated RBC presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 2.5%.

In the past 60 days, the consensus estimate for RBC’s fiscal 2025 earnings has increased 0.9%.

Generac Holdings GNRC presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.8%. 

The Zacks Consensus Estimate for GNRC’s 2024 earnings has increased 6.2% in the past 60 days.

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RBC Bearings Incorporated (RBC) : Free Stock Analysis Report

Graco Inc. (GGG) : Free Stock Analysis Report

Graham Corporation (GHM) : Free Stock Analysis Report

Generac Holdings Inc. (GNRC) : Free Stock Analysis Report

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