The Globe and Mail reports in its Tuesday edition that rising interest rates are generally bad news for dividend-paying stocks. Globe columnist Gordon Pape writes that as returns on safe government bonds rise, investors tend to shift more money away from stocks and into fixed-income assets. Some big names, however, have resisted the downward pressures and have held up well so far this year. One of these is Airboss Of America ($14.14).
After bouncing along at around the $10 level for the first couple of months of this year, this stock took off and hit a new 52-week high in mid-April. The impetus was a positive year-end financial report plus a dividend increase of 9.8 per cent. For the fourth quarter, sales were $74.2-million (U.S.), compared with $63-million (U.S.) the year before.
Profit was $3.8-million (U.S.) or 16 U.S. cents a share, fully diluted, up from $1.4-million (U.S.) or six U.S. cents in 2016. Full-year profit was down slightly, but Mr. Pape believes that investors were encouraged by the final-quarter results, the dividend hike and strong balance sheet.
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