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Lear Corporation Declares Dividend of $0.30 Per Share

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Price movement

Lear Corporation (LEA) has a market cap of $9 billion and rose 0.29% to close at $126.54 per share on November 17, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 6.1%, 9.3%, and 3.9%, respectively, on the same day.

LEA is now trading 5.2% above its 20-day moving average, 6.4% above its 50-day moving average, and 12.5% above its 200-day moving average.

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Related ETF and peers

The iShares Edge MSCI USA Value Factor ETF (VLUE) invests 0.32% of its holdings in Lear. The YTD price movement of VLUE was 9.6% on November 17.

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

  • Johnson Controls International (JCI): $40.6 billion
  • Delphi Automotive (DLPH): $18.5 billion
  • Magna International (MGA): $15.2 billion

Lear’s dividend and 3Q16 performance

Lear Corporation has declared a quarterly cash dividend of $0.30 per share on its common stock. The dividend will be paid on December 30, 2016, to shareholders of record at the close of business on December 9, 2016.

Lear reported 3Q16 net sales of $4.5 billion—a rise of 4.7%, as compared to its net sales of $4.3 billion in 3Q15. Its sales in North America fell 2.0%, and its sales in Europe and Africa, Asia, and South America rose 3.6%, 19.0%, and 30.4%, respectively, YoY (year-over-year) in 3Q16.

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Net income, EPS, and cash

Its net income and EPS (earnings per share) rose to $214.4 million and $2.98, respectively, in 3Q16, as compared to $181.0 million and $2.34, respectively, in 3Q15. It reported adjusted EPS of $3.19 in 3Q16—a YoY rise of 24.6%.

Lear’s cash and cash equivalents and inventories rose 12.1% and 12.2%, respectively, YoY in 3Q16. Its current ratio fell to 1.35x, and its debt-to-equity ratio rose to 2.2x in 3Q16, as compared to its current and debt-to-equity ratios of 1.38x and 2.1x, respectively, in 4Q15.

During 3Q16, the company repurchased ~1.3 million shares of its common stock worth $153 million.

Projections

Lear Corporation has made the following projections for 2016:

  • sales of $18.6 billion
  • core operating earnings in the range of $1.50 billion–$1.53 billion
  • free cash flow of ~$1.0 billion
  • effective tax rate of 27%
  • adjusted net income in the range of $980 million–$1.0 billion
  • capital spending of $525 million

These projections are based on the following assumptions of industry vehicle production:

  • 17.9 million units in North America
  • 22.2 million units in Europe and Africa
  • 24.2 million units in China

Now let’s discuss Nike (NKE).

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