The Whirlpool Corporation is the largest home appliance maker in the world today. It got that way by swallowing up many of the other home appliance manufacturers over the years. Today the company markets appliances under the brands Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Gladiator GarageWorks, Inglis, Estate, Brastemp, Bauknecht and Consul.
- Whirlpool is the world wide leader in the manufacture of home appliances and the company manufactures those appliances under all the leading brand names.
- Poducts are intertwined with the new housing industry and the home improvement industry, both of which are steadily improving.
- Estimates for revenues, earnings and dividends are all dramatically improving in the next two years.
- Freeze-dried ice cream was developed by the Whirlpool Corporation under contract to NASA for the Apollo missions.
Whirlpool Corporation (WHR) manufactures and markets home appliances and related products worldwide. The company’s principal products include laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers, and other portable household appliances. It also produces hermetic compressors for refrigeration systems. The company markets and distributes its products under various brand names, including Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Roper, Estate, Admiral, Gladiator, Inglis, Acros, Supermatic, Consul, Brastemp, Eslabón de Lujo, Bauknecht, Ignis, Laden, Polar, and Privileg in North America, Latin America, Europe, the Middle East, Africa, and Asia. It sells its products to retailers, dealers, distributors, builders, and other manufacturers. Whirlpool Corporation was founded in 1898 and is headquartered in Benton Harbor, Michigan. (Daily Chart) (Weekly Chart)
22 June 2014
1yr Target $172.38
1yr Cap Gain 24.13%
1yr Tot Return 26.29%
Market Cap $10.80 Bil
3yr EarnGR 8.62%
5yr EarnGR 13.23%
3yr DivGR 13.13%
5yr DivGR 7.76%
Payout Ratio 32.85%
EPS (ttm) $9.13
EPS next yr $14.11
This demand in housing and home improvement is global but it's being led by strong demand in the United States. In Europe, Whirlpool sales have recently stabilized and have now begun to increase as the ongoing economic turnaround begins all across the continent. In the emerging markets, and particularly in India, Whirlpool is continuing to manage with some success the rampant inflation and currency fluctuations that are impacting consumer sentiment in those countries. Brazil, as well as thirty-five other Latin American countries, continue to experience a strengthening domestic market combined with a rising middle class. This middle class now has an increasing level of discretionary income that most likely will be spent on homes and home improvement projects. Finally, in China Whirlpool will continue to experience continued excellent growth as their economy continues to grow.
Looking at estimates going forward I see revenues and earnings increasing dramatically as we see estimates for the world economy also improving. As with most other past recessions, economic upswings begin in the US and spread internationally. And this is exactly what we're seeing in the company's projections. We're seeing estimates of sales improving quickly in the US followed by improvements in Latin America, Europe, China and the rest of Asia.
Fortunately for income investors Whirlpool has maintained its dividend throughout this period of stress despite the fluctuations in its earnings. They have done this by allowing the payout ratio to rise from the low 20% area up to just over 40% in 2011. As earnings have improved the company has been able to let the dividend increase while at the same time letting the payout ratio decrease. This decrease will ensure that future dividends are more likely to occur and increase. I expect, as estimates below confirm, that as the economy improves, sales, earnings, and dividends will improve also.
Revenue growth rates over the last 3, 5 and 10 year periods are mediocre but they merely reflect the overall world wide economy. Fortunately earnings growth has been somewhat better but that's due to process management and cost cutting as the company assimilated other companies and squeezed out the inefficiencies. Luckily prior to the beginning of the recession (2007) the company had held the dividend payout ratio down in the low 20% level so they were able to let it rise and maintain the dividend rather than cut the dividend. It now appears that as the economy improves and the company's fundamentals improve, the dividend will begin to make some exceptional increases higher.
"Hate Laundry Love Dividends" by DivHut