Valspar has been around in one form or another since 1806 (208 years ago), when it started out as a simple Boston paint store. Thirty years later it evolved into and became primarily a varnish producing company. Then around the turn of the 20th Century, Valspar was reborn when the company created the world's first clear varnish. In the 1980s the company bought Mobil's coatings business and evolved into the corporate structure that Valspar is today.
In 1995 Valspar began expanding its sales internationally to China, Hong Kong, Brazil, Mexico, and South Africa. And today the Valspar Corporation sells its products under a number of separate brand names, many of which have been acquired through a series of acquisitions.
- In 2013 the company declared its 36th consecutive dividend increase (13%) as well as the repurchase of 5.9 million shares of company stock.
- This past year the company acquired Inver, a leading European industrial coatings manufacturer.
- They expanded sales at Lowe's stores, added Ace Hardware to their partner program, and started distribution through B&O, Europe's leading home improvement retailer.
- Potential risks include a downturn in the overall economy or the unexpected unavailability or rise in the cost of raw materials.
The Valspar Corporation (VAL) manufactures and distributes various coatings, paints, and related products worldwide. The company operates in two segments, Coatings and Paints. The Coatings segment offers decorative and protective coatings for metal, wood, and plastic primarily for original equipment manufacturing customers. Its products include primers, top coats, varnishes, sprays, stains, fillers, and other coatings used in manufacturing industries, such as agricultural and construction equipment, appliances, building products, furniture, metal fabrication, metal packaging, and transportation. This segment also provides color design and technical services. The Paints segment sells paints, primers, topcoats, aerosol spray paints, and automotive refinish paints, as well as crowns for glass bottles, and plastic packaging and bottle closures primarily through retailers, distribution networks, and company-owned stores. The company also manufactures and sells specialty polymers and colorants, as well as sells furniture protection plans, and furniture care and repair products under the Guardsman brand. The company was founded in 1806 and is headquartered in Minneapolis, Minnesota. (Daily Chart) (Weekly Chart)
14 May 2014
1yr Target $80.50
1yr Cap Gain 9.47%
1yr Tot Return 10.88%
3yr DGR 13.92%
5yr DGR 11.14%
Payout Ratio 29.68%
EPS (ttm) $3.21
EPS next yr $4.72
The company's recent acquisition of Inver, a leading European industrial coatings manufacturer, should add additional sales and profits to the top and bottom lines going forward. In addition, recent partnerships with Ace Hardware and their deal with B&O, Europe's leading home improvement retailer, will expand both sales and distribution channels internationally.
* Net Income (loss) per common share diluted in 2011 includes an impairment charge on goodwill and intangible assets of $3.75
3yr = 8.29% 5yr = 3.33% 10yr = 6.23%
Earnings Growth Rates
3yr = 13.16% 5yr = 18.31% 10yr = 11.47%
Dividend Growth Rates
3yr = 13.92% 5yr = 11.14% 10yr = 12.21%
On the weekly chart, however, it becomes more apparent that the price of the stock is in a slow but steady climb in step with its revenue and earnings growth rates. Looking at the momentum indicators, there's not a lot of upward pressure but there is pressure none the less. And a company growing at around 10% per year with a dividend increasing at 11-13% per year is a wonderful find for a dividend growth investor.
I intend to start a very small position in this company as soon as possible and then add to that position more prudently on dips in the price.
Good Luck and Good Trading.