Unifirst Corporation Announces Quarterly Dividend of $0.35 (NYSE:UNF)

Key Points

• Unifirst Corporation declared a quarterly dividend of $0.35 per share, amounting to an annualized dividend of $1.40, with a payout ratio of 16.2% that indicates it is well-supported by earnings.
• The company's shares traded at $172.15, with a market cap of $3.19 billion and a PE ratio of 21.15, while analysts expect Unifirst to earn $8.68 per share next year.
• Unifirst has initiated a $100 million stock repurchase plan, reflecting management's confidence in the company's undervalued shares, with institutional investors currently owning 78.17% of the stock.

Unifirst Corporation (NYSE:UNF - Get Free Report) declared a quarterly dividend on Tuesday, July 29th, RTT News reports. Investors of record on Friday, September 5th will be paid a dividend of 0.35 per share by the textile maker on Friday, September 26th. This represents a $1.40 dividend on an annualized basis and a dividend yield of 0.81%.

Unifirst has a payout ratio of 16.2% indicating that its dividend is sufficiently covered by earnings. Research analysts expect Unifirst to earn $8.68 per share next year, which means the company should continue to be able to cover its $1.40 annual dividend with an expected future payout ratio of 16.1%.

Unifirst Stock Performance

Shares of Unifirst stock traded down $1.85 during midday trading on Tuesday, reaching $172.15. 132,424 shares of the company's stock traded hands, compared to its average volume of 136,196. The stock has a 50 day moving average of $182.02 and a 200-day moving average of $191.89. The company has a market cap of $3.19 billion, a PE ratio of 21.15 and a beta of 0.86. Unifirst has a 12 month low of $156.34 and a 12 month high of $243.70.

Unifirst (NYSE:UNF - Get Free Report) last issued its quarterly earnings results on Wednesday, July 2nd. The textile maker reported $2.13 earnings per share for the quarter, beating the consensus estimate of $2.09 by $0.04. Unifirst had a return on equity of 7.35% and a net margin of 6.18%. The firm had revenue of $610.78 million during the quarter, compared to the consensus estimate of $614.50 million. During the same period last year, the company earned $2.20 earnings per share. The company's revenue was up 1.2% on a year-over-year basis. On average, equities analysts anticipate that Unifirst will post 7.71 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. Millennium Management LLC raised its holdings in shares of Unifirst by 37.3% during the 1st quarter. Millennium Management LLC now owns 105,331 shares of the textile maker's stock valued at $18,328,000 after buying an additional 28,589 shares in the last quarter. Jane Street Group LLC increased its stake in Unifirst by 729.0% in the 1st quarter. Jane Street Group LLC now owns 40,224 shares of the textile maker's stock worth $6,999,000 after purchasing an additional 35,372 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its stake in Unifirst by 3.9% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 34,914 shares of the textile maker's stock worth $6,075,000 after purchasing an additional 1,326 shares during the period. Royal Bank of Canada increased its stake in Unifirst by 7.8% in the 1st quarter. Royal Bank of Canada now owns 27,152 shares of the textile maker's stock worth $4,724,000 after purchasing an additional 1,974 shares during the period. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its stake in Unifirst by 4.6% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 8,966 shares of the textile maker's stock worth $1,560,000 after purchasing an additional 397 shares during the period. Institutional investors own 78.17% of the company's stock.

Unifirst announced that its Board of Directors has initiated a stock repurchase plan on Tuesday, April 8th that allows the company to buyback $100.00 million in outstanding shares. This buyback authorization allows the textile maker to reacquire up to 3.3% of its shares through open market purchases. Shares buyback plans are often a sign that the company's management believes its shares are undervalued.

Analyst Upgrades and Downgrades

UNF has been the subject of several analyst reports. Robert W. Baird set a $197.00 target price on Unifirst in a research note on Monday, June 30th. Barclays set a $152.00 target price on Unifirst and gave the stock an "underweight" rating in a research note on Monday, June 30th. JPMorgan Chase & Co. initiated coverage on Unifirst in a research note on Monday, July 14th. They set an "underweight" rating and a $175.00 target price for the company. Finally, UBS Group lowered their price objective on Unifirst from $196.00 to $194.00 and set a "neutral" rating for the company in a research report on Monday, June 30th. Two investment analysts have rated the stock with a sell rating, two have assigned a hold rating and one has issued a buy rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of "Hold" and a consensus price target of $179.50.

About Unifirst

UniFirst Corporation provides workplace uniforms and protective work wear clothing in the United States, Europe, and Canada. The company operates through U.S. and Canadian Rental and Cleaning, Manufacturing, Specialty Garments Rental and Cleaning, and First Aid segments. It designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, and aprons; and specialized protective wear, such as flame resistant and high visibility garments.

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