Dividend Growth Stock Overview: AptarGroup, Inc.

Photo courtesy AptarGroup PZ Series Spray Pump page.

About AptarGroup Inc.

AptarGroup Dividend Growth

AptarGroup manufactures dispensers for various industries, including the food & beverage industry.  Photo courtesy AptarGroup Food & Beverage’s Concentrates page.

AptarGroup Inc. develops and markets dispensing systems for use in the personal care, pharmaceutical, and food and beverage markets. Among the products that AptarGroup markets are dispensing spray pumps, bottle spouts, and aerosol valves for the personal care, food and beverage markets, and injectable and metered dosing systems for medicine delivery. The company has over 12000 employees worldwide, with 7100 located in Europe.

The company has over 5000 customers around the world, and manufacturing facilities in North and South America, Europe and Asia. As of 2013, no single customer accounts for more than 6% of net sales. Sales outside the United States make up a majority of company sales, with Europe providing a total of 58% of AptarGroup’s sales in 2013 (the latest year for which figures by country are available). Another 17% of company sales come from other foreign countries; only 25% of company sales come from within the United States. As AptarGroup is a net exporter from Europe into the United States, the company has significant exposure to the Euro and smaller exposure to the British Pound, Swiss Franc and various South American and Asian currencies; a strengthening dollar relative to these currencies will reduce the company’s earnings as expressed in U.S. dollars. The currency effect on sales numbers can be significant and the company recently reported that the effect on 2014 sales growth numbers was to decrease them by 1 – 2%.

AptarGroup modified its business segments in 2010, reorganizing the company into three business lines: Beauty & Home, Food & Beverage, and Pharma.

In 2013, the Beauty & Home segment accounted for 59% of AptarGroup’s net sales. Beauty and Personal Care sub-segments provide roughly 46% of the segment’s sales each, with Home Care accounting for the remaining 8% of segment sales. Segment sales were up 2.4%, but segment income dropped 11.5% from 2012. The company recently reported that segment sales were up 3% in 2014; including currency effects, sales growth was up 1%.

Pharma, which is the company’s most profitable segment, provided 28% of AptarGroup’s net sales in 2013. The majority (54%) of segment sales came from the prescription drug market; the remaining sales came from the consumer health care market (26% of sales) and the injectables market (20% of sales). Examples of applications for AptarGroup products include nasal sprays, measured dosing for respiratory ailments, lotion dispensers and pre-filled syringe components. The Pharma segment was a source of growth for the company as sales and income grew from 2012 by over 20% and 33%, respectively. For 2014, sales for the Pharma segment were up 7%, 6% after taking account of the currency conversion rates.

The Food & Beverage segment is the smallest of the three, accounting for 13% of company sales in 2013. Segment sales were distributed between the foods market (56%) and the beverages markets (42%). Examples of AptarGroup product applications include cooking and salad dressing sprays, sauces and condiments, and powdered food products. Segment sales and income grew from 2012 by 12% and nearly 16%, respectively. Nearly all of the sales growth came from the beverages market. In 2014, sales growth was up 9% from 2013. Currency exchange rates reduced this sales growth to 8%.

The company looks to expand through acquisitions: in 2012, AptarGroup purchased a company that developed packaging components for injectable drug delivery systems. In addition, AptarGroup invested $71.8 million in research and development activities in 2013.

For the full 2014 year, AptarGroup announced $2.6 billion in sales, up about 3% from 2013 when including currency effects (5% excluding the effects of currency conversion rates). Earnings per share were $2.85, up over 13% from $2.52 in 2013.

The company is a member of the S&P Mid Cap 400 index and S&P’s High Yield Dividend Aristocrats index, and trades under the ticker symbol ATR.

AptarGroup’s Dividend and Stock Split History

AptarGroup Dividend Growth

AptarGroup has grown its dividend at an average rate of 12.7% since 2009.

AptarGroup was spun off from the Pittway Group in 1993 and has paid dividends since then and began increasing them the following year. The company does not have a regular pattern for announcing dividend increases and has gone as long as eight quarters before increasing its dividend. (See this post on Ecolab to see how a company can go two years without increasing the dividend and still be considered to grow its dividend year over year.) AptarGroup’s most recent dividend increase was in the second quarter of 2014 when the company increased the dividend by 12% to an annualized rate of $1.12.

AptarGroup has a good record of dividend growth, with year-over-year increases greater than 10% over most of its history. From 2009 – 2014, AptarGroup grew its dividend from 60 cents to $1.09 per share, for a 5-year compounded annual dividend growth rate (CADGR) of 12.68%. Over the 10 years ending in 2014, AptarGroup has more than quadrupled its payout with a CADGR of 17.35%. AptarGroup also has an impressive 20-year CADGR of 15.85%.

AptarGroup has split its stock twice – in August 1998 and in May 2007. Both stock splits were 2-for-1.

Over the 5 years ending on December 31, 2014, AptarGroup stock appreciated at an annualized rate of 15.25%, from a split-adjusted $32.73 to $66.55. This outperformed both the 13.0% annualized return of the S&P 500 and the 14.9% annualized return of the S&P Mid Cap 400 index during this time.

AptarGroup’s Direct Purchase and Dividend Reinvestment Plans

AptarGroup does not have a direct purchase or dividend reinvestment plan. In order to invest in AptarGroup’s stock, you’ll need to purchase it through a broker. Most brokers will allow you to reinvest dividends without any fees. Ask your broker for more information on how to set this up if you are interested.

Helpful Links

AptarGroup, Inc.’s Investor Relations Website

Current quote and financial summary for AptarGroup, Inc. (finviz.com)

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.

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