Goodyear Tire & Rubber Declares Dividend of $0.07 Per Share

Goodyear Tire & Rubber Company (GT) has a market cap of $7.1 billion. It fell by 2.0% to close at $26.58 per share on July 13, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 5.3%, -1.6%, and -18.3%, respectively, on the same day. GT is trading 1.1% above its 20-day moving average, 2.0% below its 50-day moving average, and 12.2% below its 200-day moving average.

The Schwab US Mid-Cap ETF (SCHM) invests 0.27% of its holdings in GT. The ETF tracks a market-cap-weighted index of mid-cap stocks in the Dow Jones US Total Stock Market Index. The YTD price movement of SCHM was 8.6% on July 13.

The SPDR S&P 500 ETF (SPY) invests 0.05% of its holdings in GT. The ETF tracks a market-cap-weighted index of US large- and mid-cap stocks selected by the S&P committee.

The market caps of GT’s competitors are as follows:

• Cooper Tire & Rubber Company (CTB): $1.7 billion
• Boeing (BA): $86.6 billion

Goodyear Tire & Rubber has declared a quarterly dividend of $0.07 per share on its common stock. The dividend will be paid on September 1, 2016, to shareholders of record at the close of business on August 1, 2016.

Goodyear Tire & Rubber reported 1Q16 net sales of $3.7 billion, a fall of 8.3% from the net sales of $4.0 billion in 1Q15. The company’s cost of goods sold as a percentage of net sales fell 3.9% between 1Q15 and 1Q16.

The company’s net income and EPS (earnings per share) fell to $184.0 million and $0.68, respectively, in 1Q16, compared with $224.0 million and $0.82 in 1Q15.

GT’s cash and cash equivalents fell 26.9%, and its inventories rose 7.0% between 4Q15 and 1Q16. Its current ratio rose to 1.4x and its debt-to-equity ratio fell to 2.9x in 1Q16, compared with a current ratio and a debt-to-equity ratio of 1.2x and 3.0x, respectively, in 4Q15. During this quarter, the company repurchased 1.6 million shares of its common stock for $50 million.

The company has reaffirmed its projections for 2016.

• Core segment operating income growth is expected to be in the range of 10% to 15%, which excludes Venezuela.
• Free cash flow from operations is expected to be positive.
• The adjusted debt-to-EBITDAP (earnings before interest, tax, depreciation, amortization, and pension income) multiple is expected to be in the range of 2.0x to 2.1x at the end of the year.

In the next part, we’ll take a look at Hasbro (HAS).