{"id":49447,"date":"2023-08-17T03:20:11","date_gmt":"2023-08-17T07:20:11","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/hni-corporation-dividend-trends-post-q2-earnings-beat-nysehni\/"},"modified":"2023-08-17T03:20:13","modified_gmt":"2023-08-17T07:20:13","slug":"hni-corporation-dividend-trends-post-q2-earnings-beat-nysehni","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=49447","title":{"rendered":"HNI Corporation: Dividend Trends Post Q2 Earnings Beat (NYSE:HNI)"},"content":{"rendered":"
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Intro<\/strong><\/h2>\n

HNI Corporation (NYSE:HNI<\/span>) is a US outfit with interests in both ‘Workplace Furnishing’ and the ‘Residential Building markets. We actually wrote on Kimball (which subsequently has now become part of HNI on the back of its <\/span>acquisition) back in October of 2020 when HNI shares were rallying aggressively out of their pandemic lows earlier in the year.<\/span><\/p>\n

However, shares could not find the wherewithal to push on thereafter (as we see from the long-term chart below) where long-term overhead resistance halted the rally in earnest. In fact, the contraction from that May’2021 top means that shares (when we include dividend proceeds) have only returned roughly 4% over the past 34 months alone. Suffice it to say, this return is a sizable opportunity cost (as in real terms investors have lost money) given the S&P500 is up roughly 30% over the same time period.<\/p>\n

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HNI Long-Term Chart (<\/span><\/span>StockCharts.com)<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Q2 Earnings<\/strong><\/h2>\n

However, near-term share-price action has been really encouraging due to Kimball coming on board in recent months and an impressive set of Q2 numbers announced earlier this month. Q2 Non-GAAP EPS of $0.55 easily beat the consensus figure of $0.21 per share. Furthermore, revenues of over $563 million for the quarter beat the consensus target by over $13 million. Although the residential buildings products segment is expected to remain under pressure in the third quarter, the Workplace Furnishings segment is expected to report modest growth in Q3.<\/p>\n

Suffice it to say, in what has become a difficult market (volume-wise), ‘Workplace Furnishings was still able to grow its non-GAAP profits by 6% in a market that saw a 15% drop in sales for the quarter. The boost in margin was due to better productivity, successful cost-cutting measures as well as the willingness to double down on areas that had not been working as planned (e-commerce).<\/p>\n

Furthermore, the synergy tailwinds from the Kimball purchase plus the decision to liquidate Poppin should favorably impact HNI’s profit profile in the latter part of this fiscal year. On the Residential Building Products side, HNI’s near-term fundamentals remain under pressure due to what has become a weaker housing market. If investors were to foresee a turn here in this market, this would be bullish for the Residential Building Products segment as demand would return in spades.<\/p>\n

Dividend Viability<\/strong><\/h2>\n

One way of checking the validity of that long-term MACD technical bullish crossover signal is to go through the sustainability of HNI’s dividend. At present, the company pays out a yield of 3.95% based on a forward payout of $1.28 per share. This means HNI’s prevailing dividend yield comes in above HNI’s 5-year average of 3.61%. Many investors use the dividend yield as a barometer on whether shares of the company are undervalued or not so off to a good start here.<\/p>\n

Growth though in the payout is pretty mute as we see in the table below. Furthermore, given the inflationary times we are living in presently, growth in the dividend is just as important as the prevailing yield. Both in effect now need to be robust in order to protect the investor’s purchasing power over time.<\/p>\n

<\/span><\/p>\n\n\n\n\n\n
HNI Dividend Growth Time-Period<\/strong><\/td>\n%<\/strong><\/td>\n<\/tr>\n
1-Year Dividend Growth [TTM]<\/td>\n2.4%<\/td>\n<\/tr>\n
3-Year Dividend Growth<\/td>\n1.61%<\/td>\n<\/tr>\n
5-Year Dividend Growth<\/td>\n2.17%<\/td>\n<\/tr>\n<\/table>\n

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