Teleflex: Dividend Champion, Attractively Valued

Teleflex Incorporated (TFX) engages in the design, manufacture, and distribution of specialty-engineered products for medical, aerospace, and commercial markets in North America, Europe, Middle East, Africa, Latin America, and Asia. It operates in three segments: Medical, Aerospace, and Commercial.

TFX is not a dividend aristocrat, but a member of the dividend champions. It has been increasing its dividends for the past 30 consecutive years. From 1998 up until 2007 this dividend growth stock has delivered an annual average total return of 6.90 % to its shareholders.

At the same time company has managed to deliver a 6.30% average annual increase in its EPS since 1998.

 The ROE has declined slightly from 16% in the late 1990’s to about 11% in 2007.

Annual dividend payments have increased over the past 10 years by an average of 12.40% annually, which is twice as high as the growth in EPS. A 12% growth in dividends translates into the dividend payment doubling almost every 6 years. If we look at historical data, going as far back as 1990, TFX has indeed managed to double its dividend payments almost every six years on average.

If we invested $100,000 in TFX on December 31, 1997 we would have bought 2649 shares. In February 1998 your quarterly dividend income would have been $264.90. If you kept reinvesting the dividends though instead of spending them, your quarterly dividend income would have risen to $986.88 by November 2007. For a period of 10 years, your quarterly dividend income has increased by 220 %. If you reinvested it though, your quarterly dividend income would have increased by 273%.

The dividend payout has remained at or below 50 % for the majority of our study period with the exception of a brief spike in 2004. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

I think that TFX is attractively valued with its low price/earnings multiple of 17.50 and low DPR. TFX also boasts a yield of 2.40%, which is higher than the market yield.

Disclosure: Author does not own shares of TFX.

Comments

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Sep 11 08:35 PM

[wowgoldgate:]

Now that the PTR is up, the floodgates have been opened. We're beginning to see a ton of new information about the next major content patch, the Call of the Crusade, including but not limited to the new Tier 9 sets. I know, it's crazy, right? I haven't even completed my Tier 8.5 set and here comes Blizzard dumping all this new gear on my lap. Ok, it's technically not that easy to get the gear but it'll certainly be easier with the new badge loot system. Wowgoldgate help you to get your dream tier 9 gear in the most safe way. We have most best players power-leveling for you. don't hesitate to purchase it, if you can make an order now we will give you a surprising low price. any doubt please login our live chat system at tier 8 power leveling , we will give the best service!

Sep 11 08:35 PM