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Don’t Dump These Downtrodden Dividend Darlings

An earnings miss isn't the end of the world

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Sherwin-Williams SHWIt’s been a whirlwind for another Dependable Dividend and one of InvestorPlace’s 10 Best Stocks for 2013 stocks, paint and coatings maker Sherwin-Williams (SHW). The stock is up nearly 31% over the past year, but after releasing earnings of $2.56 per share for the second quarter ending June 30 — well ahead of the prior year’s earnings of $2.17 but below analyst estimates of $2.58 — shares hit the wall and fell over 9%. Increased prices for raw materials and unfavorable currency positions took their toll … but did I mention revenues increased 5.5% over that same period?

What increased even more — 28% to be exact — was the dividend declared last week, SHW’s 34th consecutive annual increase. Despite the difficult quarter, SHW sits on more than $700 million in cash, and with its continued solid record of cash flow, making that dividend payment won’t be any concern for the long term. SHW is also a steady buyer of its shares, further helping to boost your return. SHW investors would be wise to stick with this dividend payer in spite of a low (1.19%) dividend yield, as they’ve got continued room to grow the dividend well beyond a “down” quarter. Don’t let one “miss” get you down.

Article printed from InvestorPlace Media,

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