Sometimes what doesn't make headlines is where you can find something that's really happening.
Orchids Paper Products Co. (TIS) is vastly different from mega-cap Apple (AAPL). It is small potatoes with a market capitalization of just under $180 million. It's rarely in the news and rarely written about -- under the radar. It's a case, almost, of no news is good news. We like that: No volatile swings in share price. Its beta is .14!
With TIS we think we have a "steady Eddy" that promises to deliver dividend growth and price dependability. It has very low debt and sufficient financial strength to support its dividend. Over the last two years, its dividend has tripled!
It's unrealistic to expect a repeat of that stellar performance, but the good news continues. On Thursday, May 16, TIS board of directors announced a near-17% increase in dividend -- to $.35 a share from $.30. That follows two previous quarters of dividend increases.
It closed Friday at $23.01 a share. At that price, the dividend amounts to a 6.1% yield.
The increased dividend will be paid June 21, 2013 to stockholders of record at the close of business on June 7, 2013.
Dividend history for this company isn't long. It began paying a dividend in March 2011. Here's the history:
|Jun 21, 2013|
|Mar 15, 2013||0.30 Dividend|
|Nov 29, 2012||0.25 Dividend|
|Aug 31, 2012||0.20 Dividend|
|Jun 4, 2012||0.20 Dividend|
|Mar 15, 2012||0.20 Dividend|
|Dec 1, 2011||0.20 Dividend|
|Aug 31, 2011||0.10 Dividend|
|Jun 2, 2011||0.10 Dividend|
|Mar 3, 2011||0.10 Dividend|
What's more, management has an impressive comfort zone for paying out generous dividends, and for growing them. Consider this straightforward statement by TIS President and Chief Executive Officer Bob Snyder:
"Orchids continues to generate excess cash flow, so we are pleased to announce an increase in our dividend to $0.35 cents per share that continues our trend of increasing dividend payouts. This increase in our dividend, which is the fourth increase in the last eighteen months, demonstrates the confidence that the Board of Directors has in the long-term growth of our business and emphasizes our commitment to create long-term value for our stockholders."
TIS has a very low debt to equity ratio at 21%, and its dividend payout is well within the company's affordability at 75%. This company truly is a gem.
Analysts like the company as well. According to Yahoo Finance, it currently has a 1.3 recommendation, with 1 being the highest "strong-buy" score possible.
Orchids Paper Products Company is an integrated manufacturer of tissue paper products serving the at home private label consumer market. The company produces a full line of tissue products, including paper towels, bathroom tissue and paper napkins, to serve the value- through premium-quality market segments.
In the retail arena, TIS serves dollar stores, discount retailers, grocery stores, grocery wholesalers and cooperatives, and convenience stores throughout the United States. Orchids Paper Products Company was founded in 1976 and is headquartered in Pryor, Oklahoma.
Summary: For our high-yield income portfolio, TIS makes a wonderful addition. It is on track to be a dividend standout, but it has plenty of growth potential besides. As we've searched for companies with both growth and dividend-growth potential, we've been especially pleased with this under-the-radar gem.
Additional disclosure: Please note that the information presented here is not the work of licensed financial adviser or experienced investment professional. Information provided should never be construed as investment advice. It is for educational and informational purposes only, and constitutes the elements of a personal learning project.