Updated 3/11/25
Lindsay Corporation (NYSE: LNN) isn’t exactly a household name, but for investors who appreciate a stable, well-run company, it deserves some attention. This small-cap company operates in two critical industries—agriculture and infrastructure. Its irrigation systems help farmers improve efficiency, while its infrastructure products, like highway guardrails, support public safety projects.
Lindsay may not be a high-yield dividend stock, but it has consistently rewarded shareholders with steady payouts and strong financials. It’s the kind of company that doesn’t make a lot of noise but delivers over the long run. For investors who value reliability over flashy dividend yields, LNN might be worth a look.
Key Dividend Metrics
📈 Dividend Yield: 1.10%
💵 Annual Dividend: $1.44 per share
🔄 Dividend Growth: Slow but steady over time
⚖️ Payout Ratio: 22.83%, leaving room for future increases
📅 Recent Dividend Payment: February 28, 2025
⚠️ Ex-Dividend Date: February 14, 2025
Dividend Overview
Lindsay’s dividend yield currently sits at 1.10%, which isn’t particularly high but does reflect consistency. Over the past five years, the company has maintained an average dividend yield of 1.03%, showing a commitment to steady payouts.
One of the biggest positives here is the payout ratio of just 22.83%. That’s a sign that the company is keeping plenty of earnings to reinvest while still paying out to shareholders. A low payout ratio like this suggests that even in weaker economic conditions, Lindsay can continue to support its dividend.
This isn’t the type of stock that’s going to deliver oversized dividend payments, but for those who appreciate a financially disciplined company, the steady payouts are a plus.
Dividend Growth and Safety
Lindsay has a history of increasing dividends, though the growth rate is moderate. The company hasn’t been aggressive about hiking its payout, but the increases have been dependable.
More importantly, the dividend looks safe. The low payout ratio means Lindsay isn’t stretching itself thin to pay shareholders. On top of that, with a return on equity of 14.32%, the company is using its capital efficiently.
When looking at dividend safety, balance sheet strength matters, and Lindsay’s numbers reinforce that its payouts are well-covered.
Chart Analysis
Trend and Moving Averages
The price action for Lindsay Corporation (LNN) shows a clear uptrend over the past several months, with some volatility along the way. The 50-day moving average (orange line) is now above the 200-day moving average (blue line), a classic bullish signal that suggests momentum has shifted in favor of buyers.
Earlier in the chart, the 50-day was trading below the 200-day, which generally signals weakness, but that dynamic reversed around late November to December. Since then, the stock has largely stayed above both moving averages, showing sustained strength.
Currently, the price is hovering just above the 50-day moving average, which could act as a support level. If it holds, it might indicate continued upside. However, a break below it could signal a test of the 200-day moving average around the 122-125 level.
Recent Price Action
The last few candles show some hesitation around the 130-132 range. The most recent candle has a small real body, meaning there wasn’t much difference between the open and close prices. This suggests some indecision in the market, with neither buyers nor sellers in clear control.
Looking at the past five candles, there’s a mix of wicks on both ends, reflecting some back-and-forth action. Buyers have stepped in to push the price higher after dips, but they haven’t been able to push decisively past recent highs. This kind of price action often suggests consolidation before the next big move.
Volume and Market Participation
Volume has remained relatively stable, with no major spikes in either direction. The only notable volume surge came in mid-July and another in early October, both of which corresponded with sharp price moves.
More recently, volume has been lighter, which is typical during consolidation phases. If the stock makes a decisive move higher, it would be more convincing if accompanied by increasing volume. On the flip side, a drop on heavy volume could indicate stronger selling pressure.
Relative Strength Index (RSI)
The RSI, shown at the bottom of the chart, has been in a steady uptrend since late October but hasn’t hit extreme overbought levels. This suggests there’s still room for the stock to move higher without being considered overextended.
Currently, RSI is sitting in a neutral zone, meaning the stock isn’t overly strong or weak in terms of momentum. If RSI starts climbing back toward the 70 level, it could signal that the stock is gaining strength again. Conversely, if it drops toward 30, it might indicate a weakening trend.
Analyst Ratings
📈 Upgrades
In December 2024, analysts took a more optimistic stance on Lindsay Corporation, shifting their rating from sell to hold. This change was driven by stronger-than-expected cash flows and stabilization in U.S. agricultural markets. While some challenges remain, the firm’s ability to generate steady revenue from irrigation and infrastructure projects contributed to a more neutral outlook. Analysts also pointed to improving margins and disciplined capital allocation, which could support steady performance in the near term.
📉 Downgrades
On February 17, 2025, a separate group of analysts revised their rating from buy to hold, citing short-term growth limitations. The primary concern was that demand for irrigation systems may slow due to macroeconomic headwinds and changing farmer investment cycles. Additionally, the company’s valuation had approached the upper end of its historical range, leading to concerns about limited upside in the immediate future. While Lindsay remains a financially stable company, some analysts believe near-term catalysts are lacking for a significant move higher.
🎯 Consensus Price Target
As of early March 2025, analysts set an average 12-month price target of $136.00 for Lindsay Corporation. Individual targets range between $126.00 and $142.00, suggesting a moderate upside potential from current levels. This price range reflects a balanced outlook, factoring in both Lindsay’s strengths in cash flow generation and the risks tied to market cycles and competitive pressures.
Earnings Report Summary
Lindsay Corporation just released its latest earnings, and the numbers tell an interesting story. The company is holding steady with growth in some areas while facing challenges in others.
Revenue Trends
For the quarter, Lindsay pulled in $166.3 million in revenue, which is a 3 percent increase from last year’s $161.4 million. The big driver behind this growth was strong demand in international irrigation markets, which helped offset some softer results in other parts of the business.
Irrigation Business: A Mixed Picture
Looking at the irrigation segment, it was a tale of two markets.
- North America took a hit, with sales dropping 13 percent to $77.7 million from $89.4 million last year. The slowdown was blamed on lower unit sales, smaller machine configurations, and a slight drop in pricing. Farmers seem to be holding back on big purchases as they navigate a weaker net farm income outlook.
- International sales told a different story, jumping 37 percent to $69.4 million compared to $50.8 million the year before. A major project in the Middle East and North Africa region played a huge role in this growth, along with solid sales in Europe and Latin America. However, sales in Brazil struggled, and currency exchange rates worked against the company, shaving off about $2.1 million in value.
Overall, operating income for irrigation dipped slightly by 2 percent, with a margin squeeze due to the increased mix of lower-margin international projects.
Infrastructure: Revenue Down, Profits Up
The infrastructure side of the business saw a 9 percent revenue decline, coming in at $19.2 million compared to $21.2 million last year. This was mostly due to the timing of Road Zipper System lease revenue and lower sales of road safety products.
But despite bringing in less revenue, this segment actually became more profitable. Operating income climbed 14 percent to $4.1 million, thanks to better manufacturing efficiency and lower operating expenses. The operating margin improved significantly from 17.1 percent to 21.5 percent, a sign that the company is managing costs well.
Earnings and Backlog Growth
Net earnings for the quarter increased 14 percent to $17.2 million, or $1.57 per share, up from $15 million, or $1.36 per share, a year ago. Lower taxes and other income gains helped boost the bottom line.
Perhaps the biggest highlight was the company’s order backlog, which nearly doubled. It now sits at $168.2 million, compared to $86.8 million last year. The irrigation segment, especially the Middle East and North Africa project, contributed heavily to this increase, while infrastructure orders also saw some growth.
Looking Ahead
The near-term outlook remains mixed. The North American and Brazilian irrigation markets are still soft, but there are some promising signs. Commodity prices are stabilizing, and Brazil has introduced new financing programs that could encourage more investment in irrigation.
On the infrastructure side, there’s reason for optimism. Lindsay just secured a $20 million Road Zipper System project, which will be delivered in the next quarter. Federal infrastructure funding in the U.S. is still a wildcard, as rising construction costs present challenges, but demand for the Road Zipper System and safety products remains strong.
Lindsay is navigating the ups and downs well, with a strong backlog and disciplined cost management putting it in a solid position for the coming months.
Financial Health and Stability
For any dividend investor, financial stability is key. Lindsay has a solid balance sheet, with $194.07 million in cash and just $133.59 million in total debt. That’s a reassuring sign, especially for a smaller company.
The company’s current ratio of 3.87 shows that it has plenty of liquidity to cover short-term obligations. Additionally, it generates steady cash flow, with operating cash flow at $95.49 million and levered free cash flow at $47.84 million.
These numbers suggest Lindsay has no trouble funding its dividend while continuing to invest in growth. That’s a good balance for investors looking for both stability and long-term potential.
Valuation and Stock Performance
Lindsay isn’t a bargain stock, but it’s also not outrageously priced. Its price-to-earnings ratio of 21.05 is reasonable for a steady business like this. The forward P/E of 22.22 suggests that analysts expect earnings to grow, though not at a breakneck pace.
Its price-to-book ratio of 2.91 and enterprise value-to-EBITDA ratio of 13.03 indicate that the stock isn’t exactly cheap, but it’s not trading at an extreme premium either.
In terms of performance, the stock has ranged from $109.27 to $140.26 over the past year. With a 50-day moving average of $129.99 and a 200-day moving average of $123.23, the stock seems to be in a stable trading range.
One thing that makes Lindsay attractive for long-term investors is its lower volatility. With a beta of 0.70, it moves less than the broader market, making it a more predictable option in uncertain times.
Risks and Considerations
No investment is without risks, and Lindsay has a few factors that investors should keep in mind.
- Dividend growth has been slow. While the company is consistent, it hasn’t made aggressive moves to boost its payout.
- The business is cyclical. Since Lindsay serves the agriculture and infrastructure industries, revenue can fluctuate based on economic conditions.
- The yield is relatively low. For investors looking for high income, Lindsay might not be the best choice.
- Competition remains a factor. While Lindsay has a strong market position, competitors in irrigation and infrastructure could put pressure on margins.
- Valuation isn’t cheap. The stock isn’t overpriced, but it’s also not a deep-value play. Investors need to be comfortable paying a fair price for long-term stability.
Despite these risks, Lindsay’s financial strength and disciplined management make it a solid, steady choice for long-term investors.
Final Thoughts
Lindsay Corporation isn’t a stock that will grab headlines, but it has the characteristics of a reliable dividend investment. With a conservative payout ratio, strong balance sheet, and steady cash flow, it’s built for long-term stability.
While the yield may not be high, the company’s financial discipline ensures that dividends remain well-supported. For investors who value consistency and financial strength over high yields, Lindsay is worth considering.
Those looking for big dividend growth or high income might want to look elsewhere, but for a steady, well-run company in a niche but essential industry, Lindsay is a stock that deserves a spot on the watchlist.
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