Indices in the United States enjoyed a rebound Tuesday, but markets are still reeling as tensions between the U.S. and China have flared up on the trade front over the past week. Investors should consider their options, especially if they are heavily weighted in growth-oriented equities.
Today I want to go over a U.S. staple that has achieved over 50 years of dividend growth. Should you target this dividend king today? Let’s dive in.
ABM Industries (NYSE:ABM) is a provider of facility solutions through its six main segments. Shares of ABM rose 1.8% on August 6. The stock has climbed 26.9% in 2019 so far.
The company released its second-quarter fiscal 2019 results on June 5. In the first six months of the fiscal year, ABM reported an operating profit of $84.8 million which was up 30.9% from the prior year.
It reported a record $1.59 billion in second-quarter revenue. The company has upped its bookings from the prior year, demonstrating improved sales growth over Q2 2018. Adjusted income was mostly flat year over year.
The board of directors declared a quarterly dividend of $0.18 per share. This represents a modest 1.8% yield. ABM is a dividend king but lifting the dividend to a more attractive yield is clearly not a high priority.
It is, however, a strong defensive play in a turbulent market. ABM currently has a P/E ratio just above 20, so value investors may want to wait for a more attractive entry point.
