Diebold Inc. [NYSE:DBD] Feb 29, 2008 close: $24.12 Yield = 4.14%
52-week range: $23.07 [Jan. 23, 2008] - $54.50 [July 23, 2007]
Diebold manufactures, markets and services ATM machines and POS [point-of-sales] systems for retailers. They also make and service electronic voting machines for US and Latin American markets. A third product line is their physical security devices- Vaults, safes and surveillance systems. Non-US sales are around 46% of sales. Service revenues account for approximately 49% of sales and 41% of gross profits.
2007 marked the third year of earnings per share declines since Diebold hit a record $2.54 in EPS in 2004. Final earnings for 2007 are exected to have been $1.74 versus $1.82 in 2006. Why want a 'dog' like this then? Both Value Line and Forbes are expecting much better times ahead and the consensus estimate for 2008 is now at $1.92 or up 10.3% year-over-year. The shares, though, are near their lowest point in almost 8 years.
Diebold raised its dividend on Feb. 14th to $0.25 quartely making the current yield a juicy 4.14% [more than most CDs and TSYs]. The payout has been increased in at least the past 16 consecutive years and is well covered by both earnings and cash flow.
At Friday's close of $24.12 these shares trade for
The expected rebound in EPS to $1.92 and a 16.5 multiple leads to a one-year target price of $31.68 or + 31% from last week's close. Add in the better than 4% dividend for total return potential of over 35%.
Is $31 - $32 rational to expect? DBD shares have traded between $41.50 and $57.80 at their peaks in each calendar year since 2001. The target price of $31.68 is actually LOWER the the LOWS ever touched in the four years 2003 through 2006.
Jeffries and Co. analyst Yvonne Varano says Diebold has introduced "check imaging' technology into selected ATMs allowing banks to electronicaly process checks and sees this as a growth area for them. Diebold has already tapped the Chinese market by selling 6,000 ATMs to mainland Chinese banks - another obvious path to bigger potential sales and earnings.
As of year-end 2007 some heavyweight holders included:
[12/31/2007 Share Price: $28.69]
FMR LLC [Fidelity Funds] - 7.34%
Cooke & Bieler - 5.68%
Capital World Investors - 5.05%
Capital Research & Mgt. - 4.94%
MAC-PER-WOLF - 4.14%
Barclays Global inv. - 3.53%
Morgan Stanley - 3.44%
Vanguard Group - 2.74%
TCW Group - 2.64%
Bank Of America - 2.38%
With the share price near 8 year lows, a 4.14% yield and an earnings increase expected... it's time to 'Be bold with Diebold'.
52-week range: $23.07 [Jan. 23, 2008] - $54.50 [July 23, 2007]
Diebold manufactures, markets and services ATM machines and POS [point-of-sales] systems for retailers. They also make and service electronic voting machines for US and Latin American markets. A third product line is their physical security devices- Vaults, safes and surveillance systems. Non-US sales are around 46% of sales. Service revenues account for approximately 49% of sales and 41% of gross profits.
2007 marked the third year of earnings per share declines since Diebold hit a record $2.54 in EPS in 2004. Final earnings for 2007 are exected to have been $1.74 versus $1.82 in 2006. Why want a 'dog' like this then? Both Value Line and Forbes are expecting much better times ahead and the consensus estimate for 2008 is now at $1.92 or up 10.3% year-over-year. The shares, though, are near their lowest point in almost 8 years.
Diebold raised its dividend on Feb. 14th to $0.25 quartely making the current yield a juicy 4.14% [more than most CDs and TSYs]. The payout has been increased in at least the past 16 consecutive years and is well covered by both earnings and cash flow.
At Friday's close of $24.12 these shares trade for
The expected rebound in EPS to $1.92 and a 16.5 multiple leads to a one-year target price of $31.68 or + 31% from last week's close. Add in the better than 4% dividend for total return potential of over 35%.
Is $31 - $32 rational to expect? DBD shares have traded between $41.50 and $57.80 at their peaks in each calendar year since 2001. The target price of $31.68 is actually LOWER the the LOWS ever touched in the four years 2003 through 2006.
Jeffries and Co. analyst Yvonne Varano says Diebold has introduced "check imaging' technology into selected ATMs allowing banks to electronicaly process checks and sees this as a growth area for them. Diebold has already tapped the Chinese market by selling 6,000 ATMs to mainland Chinese banks - another obvious path to bigger potential sales and earnings.
As of year-end 2007 some heavyweight holders included:
[12/31/2007 Share Price: $28.69]
FMR LLC [Fidelity Funds] - 7.34%
Cooke & Bieler - 5.68%
Capital World Investors - 5.05%
Capital Research & Mgt. - 4.94%
MAC-PER-WOLF - 4.14%
Barclays Global inv. - 3.53%
Morgan Stanley - 3.44%
Vanguard Group - 2.74%
TCW Group - 2.64%
Bank Of America - 2.38%
With the share price near 8 year lows, a 4.14% yield and an earnings increase expected... it's time to 'Be bold with Diebold'.
