LONDON, UK / ACCESSWIRE / April 04, 2018 / Active-Investors has a free review on Gentex Corp. (NASDAQ: GNTX) following the Company's announcement that it will begin trading ex-dividend on April 05, 2018. To capture the dividend pay-out, investors are required to purchase the stock one day prior to the ex-dividend date, that is latest by end of trading session on April 04, 2018. Active-Investors has initiated due-diligence on this dividend stock. Register with us for more free research including the one on GNTX:
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Dividend Declared
On March 09, 2018, Gentex's Board of Directors and management announced and approved a dividend increase of 10% from $0.40 per share to $0.44 per share annually. The next dividend at the new quarterly cash dividend rate will be payable April 18, 2018, to shareholders of record of the common stock at the close of business on April 06, 2018.
Gentex's indicated dividend represents a yield of 1.91%, which is slightly higher than the average dividend yield of 1.86% for the Consumer Goods sector. The Company has raised dividend for seven years in a row.
Dividend Insight
Gentex has a dividend payout ratio of 27.2%, which means that the Company spends approximately $0.27 for dividend distribution out of every $1.00 earned. The dividend payout ratio reflects how much amount a company is returning to shareholders versus how much money it is keeping on hand to reinvest in growth, to pay off debt, and/or to add to its cash reserves.
According to analysts' estimates, Gentex is forecasted to report earnings of $1.79 for the next year, which is more than triple compared to the Company's annualized dividend of $0.44 per share.
As of December 31, 2017, Gentex's cash and short-term investments were $722.27 million compared to $723.50 million as on December 31, 2016. The Company paid down $27 million on its term loan during Q4 2017 and paid down $100 million on the same during calendar year 2017, which was in addition to normally scheduled principal repayments of $1.9 million and $7.5 million for Q4 2017 and calendar year 2017, respectively. The Company's strong financial position indicates its ability to absorb any fluctuations in earnings and cash flow and to sustain the dividend distribution for a long period.
Recent Development for Gentex
On March 09, 2018, Gentex announced that its Board of Directors has approved the Company's capital allocation strategy that is designed to increase the return of capital to shareholders, while at the same time continuing to invest in the technology evolution that is driving the Company's growth.
Gentex's capital allocation strategy is headlined by its newly announced targeted total cash position being lowered from $700 million to $525 million. The Company's Board of Directors and management believe that a lower level of total cash, in combination with cash flow from operations, is sufficient to accomplish the goals of the Company and will provide the funding necessary to accomplish strategic initiatives in regard to dividends, capital expenditures, debt repayment, and increased levels of share repurchases.
As part of the capital allocation strategy, Gentex raised its dividend by 10% and announced capital expenditures for 2018 of $115 million - $130 million, with future annual increases of capital expenditures expected to approximate the growth rates of revenue for the Company. Gentex is expecting debt repayment of $78 million during the first three quarters of 2018 in preparation of the Company's current credit facility maturing. Additionally, the Board of Directors has authorized management to secure a line of credit of up to an additional $150 million to help fund any future business needs. The Company also announced targeted share repurchase authorization of approximately $425 million for calendar year 2018.
Stock Performance Snapshot
April 03, 2018 - At Tuesday's closing bell, Gentex's stock climbed 2.55%, ending the trading session at $23.31.
Volume traded for the day: 3.14 million shares, which was above the 3-month average volume of 2.45 million shares.
Stock performance in the last month - up 2.91%; previous three-month period - up 11.26%; past twelve-month period - up 9.28%; and year-to-date - up 11.26%
After yesterday's close, Gentex's market cap was at $6.28 billion.
Price to Earnings (P/E) ratio was at 15.13.
The stock has a dividend yield of 1.89%.
The stock is part of the Consumer Goods sector, categorized under the Auto Parts industry. This sector was up 1.5% at the end of the session.
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