NEW YORK (TheStreet) -- Covidien (COV) shares received a 0.36% bump to $91.60 in trading on Thursday after the healthcare products manufacturer announced a 12.5% increase to its quarterly dividend.
Covidien announced a 36 cent per share quarterly dividend payable November 6 to shareholders of record on October 7.
The company's annual dividend payout rose to $1.44 per share from $1.28 per share with the new payout.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
TheStreet Ratings team rates COVIDIEN PLC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate COVIDIEN PLC (COV) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, COV's share price has jumped by 49.66%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, COV should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- COVIDIEN PLC's earnings per share declined by 21.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COVIDIEN PLC increased its bottom line by earning $3.40 versus $3.37 in the prior year. This year, the market expects an improvement in earnings ($4.01 versus $3.40).
- The gross profit margin for COVIDIEN PLC is rather high; currently it is at 65.07%. Regardless of COV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 11.38% trails the industry average.
- Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.02 is sturdy.
- You can view the full analysis from the report here: COV Ratings Report