Updated 3/5/25
Albany International Corp. (NYSE: AIN) is a company that might not be on every dividend investor’s radar, but it has a strong presence in two key industries—machine clothing for the paper and packaging sector and advanced materials for aerospace. The company has a long history of innovation and stability, making it a reliable name in industrial manufacturing.
With a market capitalization of around $2.21 billion, Albany International is a mid-sized company that operates in cyclical industries. The stock has seen its ups and downs over the past year, fluctuating between $67.39 and $97.60. While it has pulled back from its highs, it continues to generate solid cash flow, which is crucial for maintaining and growing dividends.
Key Dividend Metrics
📌 Forward Annual Dividend Rate: $1.08
📌 Forward Annual Dividend Yield: 1.51%
📌 Trailing Annual Dividend Rate: $1.05
📌 Trailing Annual Dividend Yield: 1.47%
📌 5-Year Average Dividend Yield: 1.10%
📌 Payout Ratio: 37.50%
📌 Dividend Growth Streak: Consistent but modest
📌 Next Dividend Date: April 7, 2025
📌 Ex-Dividend Date: March 21, 2025
Dividend Overview
Albany International has built a reputation as a steady dividend payer. While its current yield of 1.51% may not seem impressive at first glance, the company has maintained a responsible payout strategy that prioritizes sustainability over aggressive increases.
With a payout ratio of just 37.50%, Albany has plenty of breathing room to continue paying and potentially increasing its dividend. The company has a history of modest but reliable dividend growth, which makes it a solid choice for long-term income investors looking for stability.
One thing to keep in mind is that Albany’s dividend yield has historically remained in the 1% to 1.5% range. Unlike high-yield stocks, this is not a company that will provide massive income returns, but rather a steady, low-risk stream of payments backed by strong cash flow.
Dividend Growth and Safety
Albany International has done a good job of balancing dividend payments with reinvestment in its business. The company’s ability to generate free cash flow is a big factor in why its dividend is considered safe. Over the past year, it produced $168 million in levered free cash flow, giving it plenty of cushion to support its dividend obligations.
The company’s financial health further strengthens its dividend safety. With a current ratio of 3.23, it has enough liquidity to cover short-term liabilities, while its debt-to-equity ratio of 40.83% is within a reasonable range. These factors suggest that Albany is unlikely to face any major financial distress that could put its dividend at risk.
On the downside, dividend growth has not been particularly strong. While Albany has increased its payouts over time, the pace has been moderate. Investors looking for rapid dividend growth may find better opportunities elsewhere.
Chart Analysis
The chart for Albany International Corp. (AIN) is showing a clear downtrend over the past several months. Both the 50-day moving average (orange line) and the 200-day moving average (blue line) are sloping downward, which indicates sustained weakness in the stock. The 50-day moving average is below the 200-day moving average, reinforcing a bearish outlook as short-term momentum remains weak relative to longer-term trends.
In recent trading sessions, the stock has rebounded slightly from its recent lows, closing at $73.42 after hitting an intraday low of $70.91. This suggests there was some buying interest near that level, but it’s too early to say whether it marks a meaningful support zone or just a temporary bounce.
Volume has been fluctuating, with some significant spikes in selling pressure over the past few months. A large red volume bar in early March suggests heavy selling activity, which may have contributed to the sharp drop in price. The RSI (Relative Strength Index) is currently hovering at low levels, which indicates that the stock may be approaching oversold conditions. However, it hasn’t yet shown a strong reversal signal.
Overall, the stock is trading below both major moving averages, and recent price action suggests continued caution is warranted. The next few sessions will be important to determine whether this rebound has strength or if sellers will push the stock lower again.
Analyst Ratings
Albany International Corp. (AIN) has recently received a mix of upgrades and downgrades, with analysts split on its near-term prospects. While some firms see growth potential, others remain cautious about headwinds in its core industries.
📈 Upgrades
🔹 A major investment firm recently upgraded AIN to a strong-buy rating, citing improved operational efficiencies and positive industry trends. Analysts believe the company’s expansion in aerospace materials could drive long-term revenue growth and higher margins.
🔹 Another top-rated research firm raised its price target from $85 to $88, maintaining a buy rating. The firm highlighted Albany’s strong cash flow generation and its ability to sustain dividends while investing in future growth opportunities.
📉 Downgrades
🔻 A leading financial institution lowered its price target from $90 to $80, assigning an underperform rating. The downgrade was based on concerns over slow revenue growth in the industrial sector and uncertainty surrounding demand trends in the paper industry.
🔻 An independent equity research firm changed its rating from buy to hold, citing weaker-than-expected earnings in the most recent quarter. Analysts pointed to short-term volatility in orders and margin pressure as reasons to take a more neutral stance.
🎯 Consensus Price Target
Overall, analysts hold a moderate buy rating on AIN, with a 12-month price target of $83. Individual targets range from $74 on the low end to $92 on the high end, reflecting a balanced outlook. While some see long-term potential in aerospace, others remain cautious about short-term challenges in the industrial segment.
Earning Report Summary
Albany International’s latest earnings report was a mixed bag, showing some areas of strength but also a few challenges that caught investors’ attention. Revenue for the quarter came in at $298 million, which was a solid 6.1% increase from the same time last year. Most of that growth came from the Machine Clothing (MC) division, which saw a nearly 10% jump in sales, thanks in part to the acquisition of Heimbach. However, not all parts of the business saw the same momentum—there was some softness in the packaging and publication-related segments, which put a bit of a drag on overall results.
Despite the increase in revenue, profitability took a hit. Gross profit slipped to $90 million, down 11.2% from last year’s $102 million, bringing the gross margin down by about 6%. The main culprit? Changes in expected profits from long-term contracts in the Albany Engineered Composites (AEC) division, which weighed on the company’s bottom line.
Operating income also dropped, landing at $25 million, compared to $40 million in the previous year. This decline wasn’t too surprising given the higher costs associated with restructuring in the Machine Clothing segment and increased research and development expenses.
One bright spot was Albany’s tax situation. The effective tax rate for the quarter was just 6.6%, a big drop from the 25.3% rate a year ago. This provided some relief and helped soften the blow of lower earnings.
At the bottom line, net income came in at $18 million, or $0.57 per share, down from $27 million ($0.87 per share) in the same quarter last year. Adjusted earnings per share, which strip out certain one-time items, were $0.80, compared to $1.02 last year. Adjusted EBITDA, a key profitability measure, also declined to $54 million, down 17.2% from $65 million a year ago.
Looking ahead, Albany International has updated its guidance for the full year. The company now expects total revenue to land between $1.23 billion and $1.25 billion. The effective tax rate is projected to be around 27%, while capital expenditures are expected to fall between $85 million and $90 million. Adjusted earnings per share are forecasted to be in the range of $3.10 to $3.30, with adjusted EBITDA estimated between $237 million and $247 million.
Overall, Albany International is still growing its top line, but higher costs and some challenges in certain segments have created headwinds. The company is adjusting expectations accordingly, keeping a cautious but steady outlook for the rest of the year.
Financial Health and Stability
Albany International is financially solid, but there are some areas of concern. Revenue has been declining, with quarterly revenue growth down 11.3% year-over-year. However, the company remains profitable, with a 7.12% profit margin and a 10.83% operating margin.
Return on assets sits at 5.17%, while return on equity is 9.19%. While these numbers are respectable, they are not particularly high compared to top-tier dividend stocks. That said, Albany makes up for this with strong cash flow, which is one of the most important metrics for dividend investors.
The company also maintains a healthy balance sheet. With $115 million in cash and a manageable debt load of $387 million, Albany is not overleveraged. Its strong liquidity ensures that it can continue investing in its business while maintaining its dividend policy.
Valuation and Stock Performance
From a valuation standpoint, Albany International is trading at a price-to-earnings (P/E) ratio of 25.52. This is slightly above the industry average, which suggests that the stock is not particularly cheap. However, it is not excessively expensive either.
The stock is currently down 24.04% from its 52-week high, indicating that it may be in a period of consolidation. The 50-day moving average is at $80.02, while the 200-day moving average is at $83.11, meaning the stock is currently trading below both levels.
From a valuation perspective, metrics such as price-to-sales (1.82) and price-to-book (2.34) suggest that the stock is fairly priced but not necessarily undervalued. Investors looking for deep-value dividend stocks might not find Albany to be the best bargain, but those looking for a steady industrial player may find it attractive.
Risks and Considerations
While Albany International offers a stable dividend, there are a few risks to consider.
🔸 The company operates in cyclical industries, meaning its revenue and earnings can fluctuate with economic conditions. The aerospace division has strong long-term potential, but the paper industry is facing secular decline, which could impact future growth.
🔸 Revenue has been declining, and if this trend continues, it could put pressure on earnings. While cash flow remains strong, prolonged weakness in sales could impact the company’s ability to increase dividends.
🔸 The stock has a beta of 1.38, meaning it is more volatile than the broader market. Investors who prefer lower-volatility dividend stocks may want to consider more defensive options.
🔸 The dividend yield is on the lower side. While Albany’s payouts are reliable, they are not particularly high. Investors seeking higher income streams may need to look elsewhere.
Final Thoughts
Albany International is a solid industrial company that offers a safe, if not particularly high, dividend. With a low payout ratio and strong cash flow, the dividend is well-supported, making it a reliable choice for conservative income investors.
For those who prioritize stability over high yield, Albany could be an attractive option. The company has a strong balance sheet, manageable debt, and a history of steady, if slow, dividend growth.
On the other hand, investors looking for rapid dividend increases or high yields may find other stocks more appealing. While Albany is a dependable dividend payer, its growth trajectory is modest, and its industry exposure comes with some risks.
Overall, Albany International is a reliable dividend stock with a strong foundation. It may not be the most exciting pick, but for investors focused on consistency and long-term sustainability, it deserves consideration.
Recent Comments