BRIGGS & STRATTON CORP. $21 (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 47.9 million; Market cap: $1.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.briggsandstratton.com) is the world’s largest maker of lawn mower engines. The company also makes other home and garden equipment, such as portable generators, pressure washers and snow blowers.
In Briggs’s 2013 fiscal year, which ended June 30, 2013, its sales fell 9.9%, to $1.9 billion from $2.1 billion in fiscal 2012. That’s mainly because inventories remain high following last year’s droughts in North America and Australia, hurting demand for new lawn mowers and other equipment.
As well, Briggs recently stopped selling its products through mass retailers in the U.S. That’s because big chains demand lower prices from suppliers like Briggs, which hurts its profit margins.
The company continues to cut costs by closing plants. Without unusual items, Briggs would have earned $45.1 million, or $0.93 a share, in fiscal 2013. That’s down 22.1% from $57.8 million, or $1.15 a share, in fiscal 2012.
Earnings in fiscal 2014 before unusual items should improve to $1.16 a share, and the stock trades at 18.1 times that forecast. The $0.48 dividend yields 2.3%.
Briggs & Stratton is a hold.
