Dynamic Materials: Dividends in Lean Times

Jun.17.09 | About: Dynamic Materials (BOOM)

Dynamic Materials (NASDAQ:BOOM) is switching to a quarterly payout from an annual dividend, declaring the first quarterly dividend of $0.04. The payout has not been increased, but we expect more frequent payment could create interest among investors who are looking for a combination of dividends and growth.

The current yield for BOOM shares is 0.8%. The announcement should serve as a catalyst for the stock, albeit a weak one, since the decision to pay quarterly provides some assurance that management has looked down the business pipeline and decided the dividend is secure.

We continue to suggest investors approach BOOM shares with caution at the current price level. Economic conditions appear to be improving, but we continue to have concerns that industry and enterprise have many more lean months ahead.

Disclosure: Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Crystal Equity Research has a Hold rating on BOOM shares.