1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Dividend Growth Investor
Dividend Growth Investor
Articles (213) 

RPM International (RPM) Dividend Stock Analysis

October 14, 2011 | About:

RPM International Inc. (NYSE:RPM), together with its subsidiaries, manufactures, markets, and sells various specialty chemical products to industrial and consumer markets worldwide. RPM International is a dividend champion which has paid uninterrupted dividends on its common stock since 1969 and increased payments to common shareholders every year for 37 years.

The most recent dividend increase was in October 2011, when the Board of Directors approved a 2.40% increase in the quarterly dividend to 21.50 cents/share. RPM International ’s largest competitors include Valspar (NYSE:VAL), PPG Industries (NYSE:PPG) and Sherwin-Williams (NYSE:SHW).

Over the past decade this dividend growth stock has delivered an annualized total return of 11.60% to its shareholders.


The company has managed to deliver a 4.60% annual increase in EPS since 2001. Analysts expect RPM International to earn $1.60 per share in 2012 and $1.77 per share in 2013. In comparison RPM International earned $1.46 /share in 2011.


The company’s Returns on Equty has been quite volatile, and closely followed the volatility in EPS. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.


The annual dividend payment has increased by 6% per year over the past decade, which is higher than the growth in EPS. Dividend increases have been largely symbolic over the past three years however.


A 6% growth in distributions translates into the dividend payment doubling every twelve years. If we look at historical data, going as far back as 1996, we see that RPM International has actually managed to double its dividend every 15 years on average.

The dividend payout ratio has remained below 50% in only 3 of the past ten years, and has closely tracked the volatility in earnings. Based on forward earnings for 2011 however, the payout ratio is close to 50%. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.


Currently RPM International is trading at 13.40 times earnings, yields 4.10% and has a sustainable forward dividend payout. The erratic earnings picture over the past decade however makes this stock a hold.

Full Disclosure: Long RPM

About the author:

Dividend Growth Investor

Rating: 2.7/5 (3 votes)


Please leave your comment:

GuruFocus has detected 5 Warning Signs with RPM International Inc $RPM.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by Dividend Growth Investor

User Generated Screeners

star1907Good company's
star1907Best dividends charlie
cspunarSpunar Div
patelmhMY VALUE
rael2222prova dcf
liuzishuoverwrite 'Dividend Initiation
liuzishuDividend Initiation
pbarker46Dividend Growth
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat