Key Takeaways
💰 H.B. Fuller offers a 1.77% dividend yield, supported by 54 consecutive years of increases and a payout ratio under 45%, with room for continued slow, steady growth.
💵 Trailing 12-month free cash flow was $73 million, down from prior years but still covering the dividend, with total operating cash flow reaching $202 million.
📊 Analysts are split, with recent upgrades citing operational strength and discipline, while others remain cautious; the consensus price target sits around $62.50.
Last Updated 5/11/25
H.B. Fuller is a global leader in adhesives and sealants, serving essential markets like packaging, electronics, construction, and hygiene. With a history dating back to 1887 and operations in over 100 countries, the company has built a reputation for consistency and long-term dividend growth, including 54 consecutive years of dividend increases.
Recently, the stock has pulled back sharply, now trading near \$54, well off its 52-week high. This decline comes amid earnings pressure, modest revenue contraction, and higher raw material costs, but management remains confident in their strategy. With stable free cash flow, a disciplined leadership team, and a forward-looking plan to expand margins, H.B. Fuller is positioning itself for a more profitable future.
Recent Events
In the past year, H.B. Fuller’s stock has taken a hit, falling roughly 33% from its highs. A big part of that pullback stems from declining earnings and a tougher macro environment. Revenue for the trailing twelve months came in at $3.55 billion, which is down 2.7% compared to the year before. On the earnings side, things were even more challenging—quarterly earnings dropped more than 57% year-over-year.
That sounds rough, but there’s more going on under the surface. Operating margins are still hanging in at just over 7%, and EBITDA sits north of $530 million. Net income was $112 million, giving us diluted earnings per share of $1.99. In other words, the business is still profitable and still generating solid cash flow, even as it weathers a downturn.
That matters. Because while earnings fluctuate, cash keeps the dividend intact—and here, Fuller continues to hold up. Operating cash flow totaled $202 million and levered free cash flow was a little higher, at $206 million. That gives the company flexibility to keep returning cash to shareholders without stretching too far.
Right now, shares trade around $54, far from the 52-week high of $87.67. That steep drop has brought valuations back to earth. The trailing P/E ratio sits at 26.68, while the forward P/E is much more attractive at 13.68. Markets are clearly pricing in a softer outlook, but for investors focused on income, that reset opens up opportunity.
Key Dividend Metrics
📈 Forward Dividend Yield: 1.77%
💸 Forward Annual Dividend Rate: $0.94
⏳ 5-Year Average Dividend Yield: 1.14%
🔒 Payout Ratio: 44.72%
📅 Next Dividend Date: May 13, 2025
🔄 Ex-Dividend Date: April 29, 2025
📊 Dividend Growth Streak: 54 consecutive years
Dividend Overview
One of the most compelling parts of the H.B. Fuller story is how reliable the dividend has been. The current yield of 1.77% may not seem impressive at first glance, but it actually stands above the company’s five-year average. That’s largely because of the drop in share price—not a sudden increase in payouts.
The company has now increased its dividend for 54 straight years. That’s a long track record of rewarding shareholders through economic cycles, supply chain crunches, and inflationary spikes. H.B. Fuller has proven that it doesn’t just pay dividends—it commits to them.
Even better, it does so with a payout ratio that’s comfortably under 50%. At 44.72%, the dividend isn’t stretching the company’s finances. There’s still room to grow the payout and still invest in operations or debt reduction.
This isn’t a high-yield stock for investors seeking double-digit returns from dividends alone. Instead, it’s for those who prefer slow, steady, and reliable income that’s backed by a real, cash-generating business. Fuller fits that mold well.
Dividend Growth and Safety
The dividend here grows at a pace that’s intentional. The company isn’t swinging for the fences. It’s giving shareholders regular increases that reflect earnings growth and business performance. The most recent bump was modest, right in line with what Fuller has done for decades.
What makes the dividend feel secure is the strength of the company’s cash flows. With over $200 million in operating cash flow, there’s more than enough cushion to cover the dividend. Net income supports it, free cash flow covers it, and the balance sheet, while somewhat leveraged, isn’t raising any alarms.
Debt levels are higher than average, with a debt-to-equity ratio around 125%. But the company’s interest payments are manageable, and liquidity is healthy, with a current ratio just shy of 2. That gives Fuller the flexibility to navigate a few more quarters of slower growth without putting the dividend at risk.
Looking ahead, dividend growth may stay conservative, especially if earnings don’t rebound quickly. But there’s little indication that the payout is in danger. This is the kind of dividend you collect, reinvest, and forget about—until years down the line, when that slow growth and compounding really start to add up.
Cash Flow Statement
H.B. Fuller’s cash flow picture over the trailing twelve months shows a notable decline in operating cash generation, falling to $202 million from over $378 million just two years ago. Despite the drop, the company remains cash flow positive and continues to support its operations and dividend payments without needing to stretch financially. Free cash flow, a key number for dividend investors, landed at $73 million for the TTM—less than half of what it was in fiscal 2023—suggesting a tighter cash environment, though still stable.
The company has been aggressive on the financing front, issuing over $2.26 billion in debt while repaying nearly $1.92 billion during the same period. That rotation likely supported ongoing capital expenditures, which totaled about $129 million. Investing activities remain heavily negative at -$486 million, consistent with an acquisitive and expansion-focused business strategy. Even with all that activity, H.B. Fuller ended the period with $122 million in cash, a respectable position given the heavy capital deployment.
Analyst Ratings
📈 In April, Baird shifted its stance on H.B. Fuller from neutral to outperform, raising eyebrows with a fresh price target of $60. The upgrade came as analysts grew more confident in the company’s ability to sustain cash flow and manage profitability despite the broader industrial slowdown. Operational execution, paired with tighter cost controls, seemed to be the key catalysts behind the improved outlook.
📉 On the flip side, JPMorgan stuck to its underweight rating back in March, trimming its price target from $60 down to $50. Their view leaned more cautious, citing continued exposure to cyclical sectors and potential margin pressures in the near term. The note pointed to the idea that while H.B. Fuller has a well-established foundation, short-term headwinds in the adhesives market could weigh on earnings.
🎯 The current consensus among analysts places the average 12-month price target at around $62.50. Price estimates range from a low of $50 to a high of $72, reflecting a split sentiment in the market. While some see upside potential as macro conditions stabilize, others are waiting for more clear signs of revenue momentum before leaning bullish.
Earnings Report Summary
H.B. Fuller’s latest earnings came in with a mix of pressure and progress. Total revenue for the first quarter landed at $789 million, down about 2.7% from a year ago. That decline had a few drivers—foreign exchange headwinds and the recent sale of their flooring business weighed things down. Still, when you strip those factors out, organic sales actually grew by nearly 2%, with volume up and pricing slightly positive.
The company’s gross margin was a bit softer this time around, sliding about 50 basis points to 29.6%. Raw material costs have been creeping up again, which ate into some of the pricing gains. EBITDA came in at $114 million, a 7% drop compared to the same time last year, but overall in line with what the company expected.
Leadership’s Outlook
CEO Celeste Mastin remained upbeat in her commentary. She highlighted the company’s ability to drive organic growth despite a tough macro backdrop. Her focus remains squarely on pricing discipline, cost control, and streamlining operations to improve margins over time. She reaffirmed their long-term goal of hitting over 20% EBITDA margins, and pointed to steps already being taken to shift the company’s mix toward higher-margin businesses.
Segment Performance
The Hygiene, Health and Consumable Adhesives division saw 4% organic growth, driven by steady demand and pricing. However, margins there were under pressure thanks to rising input costs. Engineering Adhesives had a slight decline in organic sales, mostly tied to softness in the solar market. On the positive side, electronics and automotive were solid, and margins in this segment actually improved. A recent acquisition also helped the numbers here. Building Adhesives grew organically by 2%, helped by roofing and infrastructure projects gaining traction again.
Regional Trends
Regionally, results were mixed. The Americas slipped slightly, mostly due to softness in Hygiene and Engineering segments. Europe, the Middle East, and Africa posted 4% organic growth, helped by strong demand in hygiene products. Asia-Pacific stood out, with 7% growth, and China was a big part of that strength.
What’s Ahead
Despite the bumpy start to the year, the company is holding steady on its full-year guidance. Revenue is expected to either dip a bit or grow modestly if you adjust for the flooring business sale. EBITDA is projected to grow up to 5% over last year, and earnings per share are forecasted to land between $3.90 and $4.20. Most of the cash generation is expected to hit in the back half of the year, with operating cash flow targeted between $300 and $325 million.
One detail worth noting—debt has ticked up, now sitting at $2.07 billion, mostly due to acquisition activity. The leverage ratio has climbed a bit but remains within the range they’ve managed comfortably in the past. During the quarter, they also bought back about 678,000 shares, signaling continued confidence in their long-term game plan.