Dividend Growth Stock Overview: Roper Technologies

Photo: Freeimages.com/Tomasz Kobosz

About Roper Technologies

Roper Technologies is a diversified technology company that manufactures and markets products in a variety of – in their words – “niche markets”. Roper has its headquarters in Sarasota, Florida and at the end of 2013 employed nearly 10,000 people, including 7,000 within the United States.

Roper’s strategy is to use high operating margins and the free cash flow from its existing businesses to acquire companies that will produce additional cash flow. The company considers its management tools and governance processes as key to improving the operational execution of its businesses. In addition to acquiring businesses that produce large free cash flow, Roper seeks to improve operating margins by incorporating its governance processes into the business practices of the acquired company.

Roper has four distinct business segments covering a variety of markets:

  • Industrial Technology: This segment produces fluid handling pumps, leak testing equipment, flow measurement and metering equipment, and water meter products and systems. Applications include pumps for energy, water and industrial uses, and valves for food storage and processing facilities.
  • Energy Systems & Controls: This segment is responsible for manufacturing control systems, fluid testing equipment, industrial valves and controls and vibration sensors and non-destructive inspection and measurement products and solutions. These products are used for safety shutoff valves for oil, gas & industrial applications, testing systems and software for nuclear power plants, and control software used in energy applications.
  • Medical & Scientific Imaging: Products from this segment include software for medical applications, high performance digital imaging products and software, and handheld and vehicle-mount computers. Uses include patient positioning devices for medical imaging and oncology applications, and cameras and accessories for microscopy and spectroscopy uses.
  • RF Technology: This segment is responsible for producing radio frequency identification (RFID) communications technology and software used in toll and traffic systems, and security and access control systems. Other applications include rail, and asset and freight tracking.

The company is a member of the S&P 500 index and S&P’s High Yield Dividend Aristocrats index, and trades under the ticker symbol ROP.

As a member of the S&P 500, once Roper Industries has increased dividends for 25 consecutive years S&P will classify the company as an S&P Dividend Aristocrat. Given that Roper has made a conscious effort to increase the dividend each year for 22 years straight, I expect them to continue to do so. This would put them on track to become a Dividend Aristocrat at the beginning of 2019.

Roper Technologies Dividend and Stock Split History

Roper Technologies Dividends

Roper Industries has grown dividends an average rate of over 22% over the last 5 years, nearly tripling the payout.

Roper Technologies has increased dividends since 1994. Traditionally, the company announces dividend increases in mid-December, with the stock going ex-dividend during the first week of January. At the end of 2015, Roper announced a 20% increase in the quarterly dividend, from 25 cents to 30 cents per share, for an annualized dividend rate of $1.20 per share. I expect Roper to announce its next increase in the middle of December 2016.

Roper has grown its dividend very quickly, usually increasing the payout by at least 10%, if not more. For only a few years over the last two decades has Roper increased the dividend by single digit percentages. In fact, Roper is one of the few companies that have doubled its dividends over the last five years, having paid out 44 cents per share in 2011. Roper’s 5-year compounded annual dividend growth rate (CADGR) is 22.22% and its 10-year CADGR is 17.70%. Over the last two decades, Roper’s CADGR is a healthy 14.59%, which means that the company has – on average – doubled dividends every 5 years.

Roper Technologies has split its stock 3 times since beginning its record of dividend growth in 1993. The company split its stock in September 1993, August 1997 and August 2005; each stock split was 2-for-1. For each share of stock you owned in 1993, you would now have 8 shares of Roper stock.

Over the 5 years ending on December 31, 2015, Roper Technologies’ stock appreciated at an annualized rate of 20.42%, from a split-adjusted $74.71 to $189.17. This significantly outperformed both the 10.2% annualized return of the S&P 500 and the 9.0% annualized return of the S&P Mid Cap 400 index during this time.

Roper’s Direct Purchase and Dividend Reinvestment Plans

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

Helpful Links

Roper Technologies’ Investor Relations Website

Current quote and financial summary for Roper Technologies (finviz.com)

 

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