HILLIARD, Ohio - Advanced Drainage Systems, Inc. (NYSE: NYSE:WMS), a key player in the water management sector, has declared a 14% increase in its quarterly cash dividend, reflecting the company's robust financial health and commitment to shareholder returns. The increased dividend of $0.16 per share is scheduled for payment on March 14, 2025, to shareholders on record as of February 28, 2025. According to InvestingPro data, this marks the company's 4th consecutive year of dividend increases, with payments maintained for 11 straight years.
President and CEO Scott Barbour attributed the dividend hike to the company's solid balance sheet and substantial cash generation, which he said provides the flexibility to reward shareholders while continuing to invest strategically in the business. This move underscores ADS's confidence in its financial performance and operational excellence initiatives. The company's strong financial position is reflected in its current ratio of 3.19 and EBITDA of $858 million for the last twelve months. InvestingPro analysis indicates the stock is currently trading below its Fair Value, with 12 additional ProTips available for subscribers.
Advanced Drainage Systems, founded in 1966, specializes in stormwater and onsite septic wastewater solutions, operating approximately 70 manufacturing plants and 40 distribution centers. The company is also recognized as one of North America's largest plastic recyclers, reprocessing over half a billion pounds of plastic annually.
The information in this article is based on a press release statement from Advanced Drainage Systems, Inc.
In other recent news, Advanced Drainage Systems (ADS) reported mixed second-quarter earnings for fiscal year 2025, with growth in residential and infrastructure sales offset by challenges in the non-residential construction market and material cost inflation. The company revised its fiscal 2025 guidance, expecting revenue between $2.900 billion and $2.975 billion and adjusted EBITDA between $880 million and $920 million.
KeyBanc Capital Markets provided a positive outlook for ADS, maintaining an Overweight rating while adjusting the price target to $180. The firm cited the company's competitive financial profile and potential catalysts, such as positive construction trends, as reasons for the raised target.
Oppenheimer maintained its Outperform rating on ADS but reduced the price target from $192.00 to $184.00, following lower-than-expected financial results for the second quarter of fiscal year 2025 and adjusted full-year guidance. Despite the earnings miss and guidance reduction, Oppenheimer views the second half of the fiscal year as having lower associated risks.
Loop Capital also adjusted its price target for ADS, reducing it to $170 from the previous $180 while maintaining a Buy rating on the stock. The adjustment follows the company's recent earnings miss and reduction in its financial guidance. Despite the array of challenges, Loop Capital believes the lowered guidance may be conservative enough to suggest the nearing end of the negative revision cycle for the company.
These are the recent developments for ADS, as the company navigates a complex market environment with a mix of growth and challenges. Despite the current challenges, analysts from KeyBanc, Oppenheimer, and Loop Capital maintain positive ratings for ADS, citing the company's strong potential for growth.
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