Dover Corporation is a multi-billion dollar, global producer of innovative equipment, specialty systems and value-added services for the industrial products, fluid management, engineered systems and electronic technology markets. It's also a Dividend King and a favorite of all those Dividend Growth Investors who like to invest in companies that have increased their dividend annually over an extended period of time. Dover Corp has increased its dividend for the last 57 years.
The Company
 Dover Corporation (DOV) and its subsidiaries manufacture and sell a wide range of equipment and components, specialty systems, and support services. The company operates in four segments: Energy, Engineered Systems, Fluids, and Refrigeration & Food Equipment. The Energy segment provides engineered solutions for the extraction and handling of oil and gas in the production, downstream, and drilling markets. The Engineered Systems segment manufactures products and systems serving the refrigeration and food equipment, and other industrial markets; and designs and manufactures pumps, compressors, and chemical proportioning and dispensing products. The Fluids segment focuses on the safe handling of critical fluids across the oil & gas, retail fueling, chemical, hygienic, and industrial end-markets. The Refrigeration & Food Equipment segment provides equipment and systems for the commercial refrigeration and food service industries. Dover Corporation was founded in 1947 and is headquartered in Downers Grove, Illinois. (Daily Chart) (Weekly Chart) | 6 November Price $80.97 1yr Target $89.69 Analysts 13 1yr Cap Gain 10.77% Dividend $1.60 Yield 1.97% 1yr EST Tot Return 12.74% Market Cap $13.44 Bil Beta 1.47 EPS (ttm) $4.91 Payout Ratio 42.58% EPS next yr $5.27 P/E 16.55 PEG 1.60 Forward P/E 15.41 Debt/Equity 0.69 ROA 8.60% ROE 18.90% ROI 13.20% Sales $8.23 Bil Income $837.40 Mil Profit Margin 10.17% |
The Fundamentals
Any corporation as large as Dover Corp that is divided into 4 segments is going to have different growth rates for each of the segments and that will be displayed in the overall company's revenues and earnings. Dividends, however, will be managed by management to ensure that this volatility doesn't spill over into those quarterly payments. This is exactly what Dover Corp is doing and continued today with their latest dividend announcement.
| "Downers Grove, IL, November 6, 2014 - The Board of Directors of Dover Corporation today declared a regular quarterly cash dividend of $0.40 (forty cents) per share, payable on December 15, 2014 to shareholders of record as of November 28, 2014." |
Below you will notice both the actual yearly revenues, earnings and dividends as well as the associated growth rates. While the growth rates have varied as a result of the recession that severely affected the industrial sector, dividends were managed to maintain a pretty consistent dividend growth rate between 9.09% and 10.76%.
| Year 2015 Est 2014 Est 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 | Revenues $8.51 Bil $8.07 Bil $8.72 Bil $8.10 Bil $7.36 Bil $6.10 Bil $5.34 Bil $7.56 Bil $7.22 Bil $6.51 Bil $6.07 Bil $5.48 Bil $4.41 Bil | Earnings $5.27 $4.77 $5.78 $4.41 $4.74 $3.70 $1.91 $3.12 $3.26 $2.73 $2.50 $2.02 $1.44 | Dividends $1.71 $1.55 $1.19 $1.09 $0.97 $0.88 $0.84 $0.74 $0.63 $0.58 $0.54 $0.51 $0.47 | Payout Ratio 32.44% 32.49% 20.58% 24.71% 20.46% 23.78% 43.97% 23.71% 19.32% 21.24% 21.60% 25.24% 32.63% |
| Revenue Growth Rate 1 yr = 7.65% 2 yr = 8.84% 3 yr = 12.51% 4 yr = 13.04% 5 yr = 2.89% 10 yr = 7.05% | Earnings Growth Rate 1 yr = 31.06% 2 yr = 10.42% 3 yr = 15.85% 4 yr = 31.89% 5 yr = 13.12% 10 yr = 14.90% | Dividend Growth Rate 1 yr = 9.17% 2 yr = 10.76% 3 yr = 10.47% 4 yr = 9.09% 5 yr = 9.96% 10 yr = 9.73% |
The Technicals
The charts are showing a stock that was recently oversold but is now moving higher. It was obviously pulled down recently as the overall market recently fell. Like most stocks, mid October was an excellent buying opportunity for investors. This idea is confirmed by the RSI, the MACD and the ADX on both the daily chart as well as the weekly chart. As the price has risen, the stock has become a lot less of a desirable acquisition.
With the Bollinger Bands at $71 and $83 and the 20 day moving average near $77, a price of $81 is too expensive for the short term swing trader. Looking at the weekly chart, investors looking to get into this stock for a lengthly holding period of several years will find this stock at this price a little more palatable. It's off its high in July and August but its still above the level it was 16 months ago. And it's starting to head back up.
With the Bollinger Bands at $71 and $83 and the 20 day moving average near $77, a price of $81 is too expensive for the short term swing trader. Looking at the weekly chart, investors looking to get into this stock for a lengthly holding period of several years will find this stock at this price a little more palatable. It's off its high in July and August but its still above the level it was 16 months ago. And it's starting to head back up.
 Daily Chart |  Weekly Chart |
The Competition
Dover Corporation is part of the Diversified Machinery Industry which is part of the Industrial Goods Sector of the economy. Below are a few of the major corporations included in this industry. They each pay at least a minimal dividend and they are listed in the order of their market capitalization.
Conclusion
I like this company. And I like it's fundamentals. This is definitely a great company but it operates within the Industrial Goods Sector which is constantly subject to the overall ebb and flow of the economy. From a fundamental perspective this is a company I'd like to have in my portfolio. From a technical perspective, I can wait for the price to pullback into the mid to low $70 range (or at least to the lower Bollinger Band) before committing funds. I want to own great companies, but I want to buy them at a great price too.
Any pullback below $80 would increase the dividend yield above 2% (desirable) and a pullback to the mid $70s would increase the estimated one year capital gain to near 20% (highly desirable). Only time will tell if this stock retreats this much, but doing so would place a great company at a very desirable selling price. I plan to monitor this company while maintaining sufficient funds to take advantage of any pullback in its price.
Any pullback below $80 would increase the dividend yield above 2% (desirable) and a pullback to the mid $70s would increase the estimated one year capital gain to near 20% (highly desirable). Only time will tell if this stock retreats this much, but doing so would place a great company at a very desirable selling price. I plan to monitor this company while maintaining sufficient funds to take advantage of any pullback in its price.
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