Shares of Fastenal Co. (FAST, Financial) were up 1.7% to $66.30 in premarket trading on Thursday after reporting first-quarter 2019 results. Earnings of 68 cents per share beat consensus estimates by 1 cent and represented an 11.5% increase from the prior-year quarter.
Revenue grew 10.4% from the prior-year quarter to $1.31 billion, meeting analysts' expectations.
The revenue growth was driven by strong market demand and higher pricing, as well as industrial vending and dedicated sales and service from the customer's facility.
The fastener products segment contributed 34.8%, or about $456 million, to total revenue and the non-fastener products segment generated 65.2%, or about $854 million.
Due to customer and product mix, inflation and higher transportation costs, the gross profit margin fell 100 basis points to 47.7% of net sales, while operating income jumped 20 basis points to 20% of net sales. Operating and administrative expenses improved 110 basis points to 27.8% of net sales. Earnings before interest and taxes increased 11% to $257.5 million.
In addition, Fastenal announced the May 22 payment of a quarterly dividend of 43 cents per share to shareholders of record as of April 24. The ex-dividend date is scheduled for April 23.
The payment leads to a forward dividend yield of 2.65% compared to the industry median of 2.34% as of April 10.
Shares of Fastenal closed at $65.19 on Wednesday for a market capitalization of $18.65 billion. The stock climbed 29% over the 52 weeks through April 10 to above the 200-, 100- and 50-day simple moving average lines. The closing price on Wednesday was 37.6% above the 52-week low of $47.37 and just 2.9% below the 52-week high of $67.09.
The 14-day relative strength index of 58.38 suggests the stock is neither overbought nor oversold.
The Peter Lynch chart suggests the stock is overvalued.
Wall Street issued a hold recommendation rating for shares of Fastenal with an average target price of $61.43.
Disclosure: I have no positions in any securities mentioned.
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