DIEBOLD INC. $34 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 63.8 million; Market cap: $2.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.4%; TSINetwork Rating: Average; www.diebold.com) has cut jobs and sold two plants in response to slowing ATM sales in the U.S. These moves should cut its annual costs by $100 million to $150 million by the end of 2015. In the quarter ended September 30, 2013, Diebold lost $0.34 a share, compared to a profit of $0.25 a share a year earlier. Without unusual items, earnings per share jumped 51.4%, to $0.56 from $0.37.
Revenue fell 0.6%, to $705.4 million from $709.9 million. The company continues to see strong ATM demand from banks in Latin America and Asia, which is helping offset weaker sales in the U.S.
The company’s earnings should rise 29.6%, from a projected $1.35 a share in 2013 to $1.75 in 2014. The stock trades at a somewhat high 19.4 times the 2014 estimate. However, that’s still reasonable, particularly as Diebold continues to expand in developing markets. As well, it now gets half of its revenue from recurring software upgrades and other services. The $1.15 dividend still seems safe and yields 3.4%.
Diebold is a buy.
