Latest dividend announcement
RPM International is set to pay its first dividend for 2018. It’s expected to pay the first quarter dividend on January 31, 2018. The dividend will be paid to shareholders who hold shares in the company as of January 17, 2018. RPM International’s board declared a dividend of $0.32 per share. At the end of RPM International’s latest fiscal 2Q18 earnings, it has 135.60 million outstanding shares. Assuming that there aren’t any changes in the number of outstanding shares, RPM International will pay ~$43.40 million in dividends.
The declared dividend of $0.32 represents 6.70% growth on a year-over-year basis. Since 2012, RPM International’s dividend has grown at a CAGR (compound annual growth rate) of 3.26%. The dividend grew from $1.09 in 2012 to $1.22 at the end of 2017.
Free cash flows
RPM International has been generating positive free cash flows. Dividends are usually paid out of the free cash flow. Since 2012, RPM International’s free cash flow has grown at a CAGR of 3.10%. There were a few of years that it generated higher free cash flow. RPM International’s free cash flow growth is marginally lower than its dividend growth. A higher free cash flow growth rate is ideal. It would help RPM International have more funds for its expansion and other investment activities apart from the dividend payment.
Investors can hold RPM International indirectly by investing in the iShares U.S. Basic Materials ETF (IYM). IYM has invested 1.10% of its portfolio in RPM International. The fund also provides exposure to Monsanto (MON), Praxair (PX), and LyondellBasell (LYB) with weights of 7.80%, 7.0%, and 5.60%, respectively, as of January 9, 2018.
Next, we’ll discuss analysts’ latest recommendations for RPM International.