INDIANAPOLIS - Hurco Companies, Inc. (NASDAQ:HURC), a global industrial technology firm, has announced the suspension of its regular quarterly cash dividend on common stock, aiming to strengthen its financial position in light of market volatility. This move is intended to improve cash flow and allow for strategic reinvestment in the company's core operations and research into emerging technologies.
The suspension is effective immediately, according to Hurco's President and CEO, Greg Volovic. He stated that while the decision was difficult, it is expected to benefit the company's cash management and enable better capital allocation across various strategies. Hurco remains committed to shareholder value and plans to resume dividends and share repurchases when deemed appropriate.
During the current fiscal year ending October 31, 2024, Hurco paid two quarterly cash dividends of $0.16 per share. The Board will continue to evaluate the possibility of future dividends based on a range of factors, including the company's performance, financial health, and market conditions, though there is no guarantee dividends will be reinstated.
The company, known for its computer numeric control (CNC) machine tools and proprietary software, operates internationally with manufacturing facilities in Taiwan, Italy, the U.S., and China. Hurco serves a diverse set of industries, including aerospace, defense, medical equipment, energy, transportation, and computer equipment, through both direct and indirect sales channels.
This announcement is based on a press release statement from Hurco Companies, Inc.
InvestingPro Insights
In light of Hurco Companies, Inc.'s recent decision to suspend its regular quarterly cash dividend, a closer look at the company's financials through InvestingPro's real-time data reveals a mixed picture. With a market capitalization of $112.07 million, Hurco is trading at a low Price / Book multiple of 0.52, indicating that the company's stock may be undervalued relative to its assets. This is particularly relevant to investors who seek out value investment opportunities.
Despite a challenging period reflected by an 8.74% decline in revenue over the last twelve months as of Q2 2024, Hurco maintains a strong balance sheet, holding more cash than debt. This is a reassuring sign for investors concerned about the company's ability to navigate through market volatility and invest in growth opportunities. Additionally, the company's commitment to shareholder value is evidenced by its history of dividend payments, having maintained them for 12 consecutive years before the recent suspension.
However, it's worth noting that Hurco's P/E ratio stands at a high 81.37, suggesting that the stock may be overvalued based on its earnings. The company's strategic shift to suspend dividends could be a move to better align its financial strategies with the current earnings landscape. Investors interested in deepening their analysis of Hurco can explore further with InvestingPro, which offers additional InvestingPro Tips, including insights on the company's liquidity and valuation multiples. There are 6 more InvestingPro Tips available for Hurco at: https://www.investing.com/pro/HURC. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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