Keithley Instruments, Inc. (KEI) recently raised its dividend to pre-recession levels as orders jumped and demand improved across the globe. The company trades with a forward P/E of just 9.8, which is well under the industry average of 17.5.Keithley Instruments manufactures electronic instruments and systems. It produces about 500 products used to source, measure, connect, control or communicate direct current (DC) or pulsed electrical signals.
Its customers include scientists and engineers in the electronics industry involved in advanced materials research, semiconductor device development and fabrication and the production of products such as portable wireless devices.
Keithley Increases Its Dividend
On May 10, Keithley announced it was raising its dividend to $0.0375 per share from $0.0125 per share. It is payable on June 30 to shareholders of record as of the close of business on June 16.
This is a restoration of the dividend to levels previously seen before the recession, in 2009.
The current yield is 1.8%.
Sales Jumped 25% in the Fiscal 2010 Second Quarter
On Apr 29, Keithley reported fiscal 2010 second quarter results which easily beat the Zacks Consensus by 225%. Earnings per share were 26 cents compared to the consensus of 8 cents. It was a big reversal from a year ago, where the company lost 66 cents per share.
Sales also rebounded by 25% to $29.8 million from $24 million in the second quarter of fiscal 2009. Sales also gained 5% from the first quarter of 2010.
The company is heavily weighted overseas, with 70% of sales coming outside of the Americas. The strengthening dollar will impact earnings in the third quarter as the weaker dollar accounted for 3% of sales in the fiscal second quarter.
Orders rebounded 42% to $30.8 million from $21.7 million a year ago. The year ago quarter, however, was the bottom of the cycle as far as the recession. The rebound was due to increased customer demand from the global recovery. Orders were also up 14% from the end of the fiscal first quarter, which ended Dec 31, 2009.
Orders increased across all geographic regions, with Asia, not surprisingly, seeing the strongest growth of 65% compared to a year ago. The Americas rose 30% and Europe increased 35%.
Outlook for the Third QuarterKeithley is expected to report third quarter results on July 29. It has estimated sales in the range of $27 million to $30 million.
There is only one estimate for the quarter and the year but that analyst is bullish about the company.
The fiscal third quarter Zacks Consensus is up 11 cents to 20 cents in the last 60 days.
Similarly, the full year consensus has jumped 85% to 89 cents from 48 cents in the last 2 months. Keithley lost 71 cents in 2009, so 2010 appears to be a nice rebuilding year for the company.
Fundamentals
Keithley has solid fundamentals and would qualify as a value stock according to several criteria.
In addition to its single digit P/E ratio, which gives it an attractive valuation, Keithley also has a price-to-book ratio of 2.9, which is just within the value parameter of under 3.0.
No comments:
Post a Comment