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Whirlpool (WHR) Boosts Shareholder Returns: What's Ahead?

Zacks Equity Research
·4-min read

Amid coronavirus-related tensions, Whirlpool Corporation WHR cheers investors with its accelerated shareholder-friendly moves. The company hiked its quarterly dividend by 12% and authorized an additional $2-billion in its share buyback program. The company's board has approved a 15-cent dividend raise to $1.40 per share versus the prior payout of $1.25 per share. The new dividend is payable Jun 15, 2021, to stockholders of record as on May 21, 2021. Markedly, this dividend hike marks the company’s ninth straight year of an increase.

Notably, the latest dividend hike increases its annualized dividend rate to $5.60 per share versus the prior figure of $5. Dividend hikes not only boost shareholder returns but also raise market value of the stock. Through this, companies try to win investors and persuade them to either buy or hold the scrip instead of selling it. Last October, the company’s board raised its quarterly dividend by 4.2% to $1.25 per share from $1.20 per share. During 2020, it paid dividends of roughly $300 million.

We note that the latest buyback authorization is in addition to the company’s $531-million unused portion of the earlier program as of Dec 31, 2020. During 2020, Whirlpool repurchased nearly 902,000 shares for $121 million under this program. In July 2017, the company’s board authorized an additional share repurchase program of about $2 billion. Well, these efforts clearly reflect the company’s commitment toward boosting shareholders’ value.

What Else Should You Know?

Whirlpool has been benefiting from higher demand for kitchen and home appliances as consumers continue to invest in home upgrades with increased stay-at-home practices. Additionally, the company has been benefiting from the execution of its go-to-market strategies and cost-takeout endeavors. Moreover, the enhancement of e-commerce and direct-to-consumer capabilities is acting as tailwinds. Impressively, the company’s shares have increased 19.5% in the past six months versus the industry’s 18.2% gain.



Buoyed by such efforts, we expect Whirlpool to beat on earnings estimates when it reports first-quarter 2021 results tomorrow. According to our Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. Impressively, the company has the required blend, having a Zacks Rank #2 and an Earnings ESP of +1.47%

Moreover, this home-appliance maker is likely to have witnessed revenue and earnings growth in the quarter under review. The Zacks Consensus Estimate for the company’s first-quarter earnings is pegged at $5.04, indicating 78.7% growth from the year-ago quarter’s tally. Moreover, the quarterly revenues stand at $4.77 billion, indicating an increase of about 10% from the year-ago quarter.

More Bets in the Broader Consumer Discretionary Space

Rent-A-Center RCII has an earnings surprise of 12.2% for the past four quarters, on average. The company currently has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Funko FNKO has a long-term earnings growth rate of 26.2% and currently has a Zacks Rank #2.

BrightView Holdings BV has an earnings surprise of 11.2% for the past four quarters, on average. It boasts a Zacks Rank #2.

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RentACenter, Inc. (RCII) : Free Stock Analysis Report

Whirlpool Corporation (WHR) : Free Stock Analysis Report

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Funko, Inc. (FNKO) : Free Stock Analysis Report

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