Updated 3/6/25
Brady Corporation (NYSE: BRC) isn’t the kind of stock that grabs headlines, but it has built a strong reputation over the years. Founded in 1914, this Milwaukee-based company has been providing identification and workplace safety solutions for more than a century. It serves industries like healthcare, manufacturing, and logistics by offering products such as barcoding labels, facility signage, and lockout-tagout systems.
For dividend investors, Brady is a steady, reliable name. It may not have the highest yield on the market, but what it lacks in high payouts, it makes up for with financial stability and a long history of rewarding shareholders. If you’re looking for a stock with dependable income and solid fundamentals, BRC is worth a closer look.
Key Dividend Metrics
📈 Dividend Yield: 1.37%
💰 Annual Dividend: $0.96 per share
🛡️ Payout Ratio: 23.63% (indicating a highly sustainable dividend)
🚀 5-Year Dividend Growth Rate: Moderate but steady
📅 Ex-Dividend Date: April 9, 2025
🎯 Dividend Payment Date: April 30, 2025
Dividend Overview
Brady’s dividend yield of 1.37% might not seem exciting at first glance, but that’s not the full story. What makes this stock appealing to long-term investors is its consistency. The company has paid dividends for decades, and with a payout ratio of just 23.63%, it has plenty of room to keep those payments coming.
Unlike some companies that pay out the majority of their earnings, Brady takes a conservative approach. This allows the company to reinvest in its business while still rewarding shareholders. That balance is one of the reasons BRC remains attractive for those who prioritize dividend security over high yield.
Dividend Growth and Safety
Brady’s dividend safety is backed by strong financials and a disciplined management approach. The company has maintained a steady dividend even through economic downturns, which speaks volumes about its stability.
A few key factors make Brady’s dividend particularly secure:
- Profitability: With a profit margin of 13.62% and an operating margin of 15.96%, the company generates solid earnings that support continued dividend payments.
- Cash Flow Strength: Brady’s operating cash flow of $219.72 million is more than enough to cover its dividend obligations.
- Minimal Debt: The debt-to-equity ratio of just 11.62% keeps the company financially flexible, reducing risks to future dividends.
Dividend growth has been steady rather than rapid. Brady tends to increase payouts at a measured pace, making it ideal for investors who prefer reliability over aggressive dividend hikes. While the yield may not be eye-popping, it’s backed by a foundation of strong earnings and careful capital management.
Chart Analysis
Price Action and Moving Averages
The price chart for Brady Corporation (BRC) shows a steady uptrend for most of the past year, but the stock has recently pulled back from its highs. The 50-day simple moving average (SMA) has started to trend downward, signaling a potential shift in momentum. Meanwhile, the 200-day moving average remains in an upward trajectory, suggesting that the longer-term trend is still intact.
What stands out is that the stock has dropped below the 50-day moving average, which often acts as a short-term support level. The price is now hovering near the 200-day moving average, a level that long-term investors watch closely. If it holds, it could serve as a strong support zone, but if it breaks below, it may indicate further downside pressure.
Volume and Market Participation
Volume has been relatively stable with occasional spikes, indicating moments of heightened buying or selling interest. However, in recent trading sessions, there hasn’t been a significant surge in volume to suggest a major trend reversal. The lack of high-volume buying as the price approaches the 200-day moving average could mean that buyers are waiting for confirmation before stepping in.
Relative Strength Index (RSI)
The RSI is sitting at approximately 39, which is near the lower end of the neutral zone. This suggests that the stock is approaching oversold territory but hasn’t quite hit extreme levels yet. A reading below 30 would typically indicate that the stock is deeply oversold, potentially setting up for a bounce. If the RSI remains weak, it could signal that downward momentum is still in play.
Recent Candlestick Patterns
Looking at the last few candlesticks, there is a clear battle between buyers and sellers. The stock attempted to push higher but was met with selling pressure, as seen in the long upper wicks on recent candles. This suggests that rallies are being sold into, preventing a strong breakout. At the same time, the stock hasn’t seen a major breakdown either, meaning there is still some level of support.
Key Levels to Watch
With the price now testing the 200-day moving average, this will be a key level to monitor. If the stock holds above this point and finds buying support, it could stabilize and attempt to reclaim the 50-day moving average. On the other hand, if it breaks below the 200-day moving average with increased selling volume, it may indicate further downside ahead. The RSI also remains something to watch, as a drop below 30 could attract more buyers looking for a rebound.
Analyst Ratings
In recent times, Brady Corporation (BRC) has experienced a mix of analyst opinions, reflecting both optimism and caution.
Upgrades:
- January 2024: BofA Securities upgraded Brady from “Underperform” to “Buy,” adjusting the price target from $51 to $65. This upgrade was driven by Brady’s strategic initiatives in emerging markets across Asia and Europe, along with improvements in supply chain efficiency, which are anticipated to enhance sales and operating margins.
Downgrades:
- February 2022: Wells Fargo downgraded Brady from “Overweight” to “Equal Weight,” revising the price target from $60 to $52. The downgrade stemmed from concerns about potential headwinds in the company’s core markets and the impact of global economic uncertainties on its performance.
Consensus Price Target:
As of the latest data, the consensus among analysts is a price target of $87 for Brady Corporation. This reflects a generally positive sentiment, with expectations of continued growth and profitability. However, it’s important to note that analyst opinions can vary, and investors should consider multiple factors when evaluating such targets.
Earnings Report Summary
Brady Corporation just released its latest earnings report, and there’s plenty to unpack. The company saw a solid boost in sales, some strong strategic moves, and a few areas where things didn’t quite go as planned.
Sales Growth Holding Strong
Brady’s revenue for the quarter came in at $356.7 million, up 10.6% from the same period last year. A big chunk of that growth came from acquisitions, which contributed over 10%, while organic sales added another 2.6%. The company faced some headwinds from foreign currency fluctuations, but overall, demand remained strong. The Americas and Asia led the way with a 10.5% jump in sales, while Europe and Australia saw similar gains, though organic sales in those regions were slightly weaker.
Earnings Dip, But Adjusted Profits Improve
Despite the higher sales, reported earnings per share dipped to $0.83 from $0.90, marking a 7.8% decline. That said, when factoring out some one-time costs, adjusted earnings per share actually rose 7.5% to $1.00. Net income came in at $40.3 million, down a bit from last year’s $43.6 million, but adjusted net income saw an uptick, reaching $48.1 million. It’s a mixed picture, but the company’s core profitability remains in decent shape.
Cash Flow and Balance Sheet Look Healthy
One of the standout positives from the report is Brady’s cash flow. The company pulled in $39.6 million in operating cash flow this quarter, up from $36.1 million a year ago. With a net cash position of $50.8 million, Brady has plenty of financial flexibility. Whether it’s for investing in new products, acquisitions, or rewarding shareholders, the company is in a comfortable position.
Investments and Cost-Cutting Moves
Brady isn’t just sitting still. The company introduced its new i7500 high-speed printer, designed to cut down on material waste and make life easier for customers. On the cost-cutting side, they’re closing two facilities—one in Beijing and another in Buffalo—to streamline operations. Those closures did come with some restructuring costs of $5.7 million, but in the long run, they should help keep expenses in check.
Raising the Guidance Floor
Looking ahead, Brady is feeling confident enough to tweak its full-year earnings forecast. The company lifted the lower end of its adjusted earnings per share outlook, now expecting between $4.45 and $4.70 per share, slightly higher than the previous range. That means they’re projecting anywhere from 5.5% to 11.4% growth compared to last year.
All in all, the company’s results show steady growth, disciplined cost management, and a focus on innovation. While net income dipped slightly, the bigger picture suggests Brady is on solid footing heading into the rest of the year.
Financial Health and Stability
A company’s ability to sustain dividends depends on its financial health, and Brady is in excellent shape.
- Cash on hand: $138.45 million in cash gives it plenty of flexibility.
- Low debt burden: With total debt of $130.16 million, the company is far from overleveraged.
- Healthy return metrics: A return on equity (ROE) of 17.92% and return on assets (ROA) of 10.46% show that management is effectively using its resources to generate profits.
With a current ratio of 1.90, Brady has more than enough assets to cover its short-term obligations. That level of financial strength provides reassurance that dividends will remain secure even if the broader economy faces headwinds.
Valuation and Stock Performance
Brady’s stock is currently trading at $69.73, with a trailing P/E ratio of 17.40. This valuation suggests the stock is reasonably priced based on its earnings.
Other valuation metrics confirm that BRC is not overextended:
- Price-to-sales ratio of 2.38
- Enterprise Value/EBITDA of 11.80, which is in line with its historical range
- Stock performance: Currently down from its 52-week high of $77.68, but well above its 52-week low of $56.71
Looking at the technical side, BRC’s 50-day moving average sits at $73.59, while the 200-day moving average is $71.86. The stock is currently trading below both, suggesting it has been in a mild downtrend in the short term. However, given its history of stability, that doesn’t raise significant concerns for long-term investors.
Risks and Considerations
No stock is without risks, and while Brady is financially stable, there are a few factors investors should be aware of:
- Slower Dividend Growth – Brady tends to increase its dividend at a steady but modest rate. It’s not the best choice for investors seeking rapid dividend growth.
- Economic Sensitivity – As an industrial company, Brady’s revenue can be affected by slowdowns in manufacturing and construction. If demand weakens, earnings could take a hit.
- Foreign Exchange Fluctuations – With global operations, currency movements can impact revenue and profitability, particularly when the U.S. dollar is strong.
- Stock Volatility – While BRC has a relatively low beta of 0.71, meaning it’s less volatile than the broader market, it can still experience price swings during broader market downturns.
Final Thoughts
Brady Corporation is a stable, dependable dividend stock for those who value consistency over high yields. It won’t deliver the kind of headline-grabbing returns that some high-growth stocks might, but it also won’t keep investors up at night worrying about dividend cuts.
With low debt, strong cash flow, and a conservative payout ratio, Brady is positioned to continue rewarding shareholders for the long haul. While it may not be the best choice for investors seeking rapid dividend growth, it remains a solid pick for those looking for a low-risk, long-term income investment.
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