LONDON, UK / ACCESSWIRE / July 17, 2017 / Pro-Trader Daily takes a closer look at Compass Diversified Holdings LLC (NYSE: CODI) as the Company’s stock will begin trading ex-dividend on July 18, 2017. In order to capture the dividend payout, investors must purchase the stock one day prior to the ex-dividend date that is by latest at the end of trading session on July 17, 2017. Are you looking for research on dividend stocks, if so register with us now for your free membership at:
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On July 06, 2017, Compass Diversified, an owner of leading middle market businesses, announced that its Board of Directors has declared a quarterly cash distribution of $0.36 per share. The distribution for the three months ended June 30, 2017, is payable on July 27, 2017, to all holders of record as of July 20, 2017.
Compass Diversified’s indicated dividend represents a yield of 8.21%, which is more than double the average dividend yield of 3.24% for the Financial Goods sector. The Company has declared a distribution each quarter since its May 2006 IPO. The dividend announcement marked a significant milestone for Compass Diversified as the Company has cumulatively distributed $15.3552 per share back to its shareholders, which is in excess of the full IPO price.
Compass Diversified has a dividend payout ratio of 95.4%, which indicates that the Company distributes approximately $0.95 for every $1.00 earned. The dividend payout ratio reflects how much money 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, Caterpillar is forecasted to report earnings of $1.72 in the coming year, which sufficiently covers the Company’s annualized dividend of $1.44.
As on March 31, 2017, Compass Diversified had $115.3 million in cash and cash equivalents, $564.2 million outstanding on its term loan facility, and no outstanding borrowings under its revolving credit facility. The Company has no significant debt maturities until 2019. The strong financial position provides a cushion for the Company to absorb any fluctuations in earnings and pay its dividend without interruption for a long period of time.
About the Company
Compass Diversified owns and manages a diverse family of established North American middle market businesses. Each of its current subsidiaries is a leader in its niche market. Compass Diversified maintains controlling ownership interests in each of its subsidiaries in order to maximize its ability to impact long-term cash flow generation and value. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. Compass Diversified utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and to make cash distributions to its shareholders.
Recent Development for Compass Diversified Holdings
On June 19, 2017, Compass Diversified announced that it has priced a $100 million public offering of 4,000,000 of its 7.250% Series A Preferred Shares with a liquidation preference of $25.00 per share. The Company has granted the underwriters a 30-day overallotment option to purchase up to an additional 600,000 Series A Preferred Shares. CODI will use the net proceeds from the offering to repay a portion of the outstanding balance of its revolving credit facility and for general corporate purposes.
On Friday, July 14, 2017, the stock closed the trading session at $17.75, climbing 2.01% from its previous closing price of $17.40. A total volume of 214.72 thousand shares has exchanged hands, which was higher than the 3-month average volume of 153.03 thousand shares. Compass Diversified’s stock price advanced 4.41% in the last one month, 5.34% in the past three months, and 5.40% in the previous twelve months. The stock is trading at a PE ratio of 110.25 and has a dividend yield of 8.11%. The stock currently has a market cap of $1.04 billion.
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SOURCE: Pro-Trader Daily