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Real-Money Stock Picks / Bryan Hinmon

URL:  https://boards.fool.com/mantech-declares-a-dividend-29304283.aspx

Subject:  ManTech declares a dividend Date:  5/17/2011  12:05 PM
Author:  TMF42 Number:  52 of 77

http://investor.mantech.com/phoenix.zhtml?c=130660&p=iro...

Dividend initiations are a big signal from management -- they symbolize very high confidence in future earnings power. It could also signify a dearth of reinvestment opportunities or acquisition candidates, but in ManTech's (Nasdaq: MANT) case, I'm not worried about apparent growth issues.

Given a flattish or declining defense budget I didn't expect ManTech to be overwhelmed with growth opportunities. It will grow its revenue just fine given its competencies and segment exposures, and it'll have plenty of cash left over to entertain acquisitions.

Here are some quick details on the dividend...

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Six-month dividend per share $ 0.42
Annualized dividend $ 0.84

Current shares o/s 36.6 MM
Annual cost of dividend $ 30.7 MM
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2010 net income $ 125.1 MM
NI payout ratio 24.6 %
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2010 free cash flow $ 160.0 MM
FCF payout ratio 19.2 %
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Cash on BS $ 73.0 MM
Total debt $ 200.0 MM
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Dividend initiations aren't something a compnay takes ligthly, so this is a positive for ManTech. And the company looks to have plenty of cash generating ability to support this, and future dividend payments.

Bryan
TMF42
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