Acushnet Holdings Corp. (NYSE:GOLF) has been making headlines recently with its quarterly earnings results and dividend payout announcements. The company’s latest financial report, released on May 4th, surpassed analysts’ expectations with earnings per share of $1.36. This was a significant increase from the prior year’s Q1 earnings of $1.10 per share. The company also reported robust revenue growth of 13.2% in the quarter, exceeding analyst forecasts.
Following this positive news, Acushnet announced a quarterly dividend of $0.195 per share for stockholders of record on June 2nd. The dividend payout, scheduled for June 16th, represents an annualized dividend of $0.78 per share and a yield of 1.46%. However, investors should note that the ex-dividend date for this payout is June 1st.
Despite the company’s impressive earnings performance and dividend announcements, some research analysts have expressed mixed opinions about Acushnet’s future prospects. Morgan Stanley lifted its target price for GOLF shares from $50 to $54 with an “equal weight” rating in March, while KeyCorp issued an “overweight” rating in April alongside a target price of $57 per share.
On the other hand, Compass Point lowered its rating from “buy” to “neutral” and cut the stock price objective from $65 to $55 in March following Acushnet’s earnings report and Tigress Financial upgraded shares from “neutral” to “buy” alongside raising the target price from $50 to $62 in mid-March. The consensus among Bloomberg analysts is that GOLF deserves a “hold” rating complemented by an average target stock price of around $52.
Overall, Acushnet seems likely to continue attracting investors’ attention after strong financial reports coupled with consistent dividends payouts and it remains to be seen what will be next move by investors after these recent developments.
Acushnet’s Dividend Growth, Market Performance and Risk Factors
Acushnet, the parent company of Titleist and FootJoy, recently raised its dividend by an average of 8.7% over the past three years and has raised its dividend annually for six consecutive years. The payout ratio of 25.5% indicates that the company’s earnings sufficiently cover its dividend payout. Analysts are expecting a per-share earning of $3.09 in the coming year, which gives Acushnet an expected future payout ratio of 25.2%.
On Friday May 7th, NYSE GOLF traded at $53.25 with a trading volume of 397,963 shares compared to an average volume of 336,944 shares. While Acushnet has a market capitalization of $3.59 billion and a beta value of 0.80, it also carries some risk with a current ratio of 1.93 and a quick ratio of just 0.70 due to debt-to-equity ratio of 0.54.
Several research analysts have issued reports on GOLF shares recently, including Morgan Stanley raising the target price from $50 to $54 per share and rating it “equal weight” in early March; Compass Point cutting shares from “buy” to “neutral” in mid-March with a lowered target price from $65 to $55 per share; KeyCorp initiating coverage on April 19th with an “overweight” rating and a target price set at $57 per share.
In related news, corporate insiders such as Thomas Pacheco have recently sold thousands of shares with Pacheco alone selling off about 20k at an average cost above $51 per share, garnering over one million dollars from this transaction.Institutional investors such as Vanguard Group Inc., Dimensional Fund Advisors LP and State Street Corp have increased their stake in Acushnet respectively by purchasing additional stocks worth millions in totality.
While the consensus rating of “hold” may not inspire much confidence among potential investors, the relatively high dividend payout ratio and consistent yearly dividend raises, and ratings from reputable analyst firms could present strong opportunity for patient investors. As with any investment strategy, potential investors are strongly advised to conduct thorough research to gain a full understanding of the company’s financials and strategize based on their unique situations.
