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ManpowerGroup (MAN) reports earnings on October 19th, 2012. The stock is trading around $35.9 versus its 52-week range of $30.53-$48.2, down 7% in the last 1 year. The stock trades at a P/E multiple of 13.5 times versus a forward multiple of 12 times. Manpower yields 2.4% with a 5-year dividend growth of 5.3%. Top institutional holders of the stock are Wellington Management (7%), Artisan Partners (4.6%), The Vanguard group (4%), Lord Abbett (4%), and Hotchkis & Wiley Capital Management (4%).

Factors that support a dividend payment:

ManpowerGroup has a strong balance sheet with $455 million in cash & cash equivalents, and $447 million in public debt. On June 22nd, 2012, the company issued 350 million euros in debt, which was used to pay down their credit facility. In a 10Q filing for quarter ended 6/30/2012, the company stated that they expect to be in compliance with their financial covenants for the next 12 months. Manpower has clearly been focused on reducing leverage on their balance sheet.

The jobless claim number is a leading indicator of the staffing market. Any improvement in this data will trigger an improvement in the company's fundamentals. Last week's jobless claim number was down 4% from the Q2-2012 average. If this trend continues, a positive impact on top line growth will be seen.

Looking at earnings history, in Sep 2011, the company reported EPS at 0.97 vs. estimate at 0.94 (surprise of 3.2%), in Dec 2011, reported EPS at 0.98 vs. estimate at 0.87 (surprise of 12.6%), in Mar 2012, it reported EPS at 0.5 vs. estimate at 0.35 (surprise of 42.9%), and in Jun 2012, the company reported 0.76 vs. estimate at 0.71 (surprise of 7%). This brings the average earnings surprise to be 16.42%.

Conclusion: The biggest positive for the company is its well-managed balance sheet in a weak economic and staffing environment. Although challenges remain in the short-run, a disciplined management team provides for dividend protection.

The chart below compares share performance versus the S&P 500 over the past year

click to enlarge image

Here is an extended list of dividend stocks reporting this week with 4 consecutive quarter surprises.

Written by Kapitall's Sabina Bhatia. Tool provided by Kapitall.

Disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

Source: ManpowerGroup: A Dividend Stock With Earnings Potential