Dover Corporation subsidiary SWEP signed a major renewable energy contract
Dover Corporation (NYSE: DOV) is a global manufacturer of industrial products. SWEP, a subsidiary of Dover, announced on March 18 that it had signed a multi-year contract with Kvitebjørn Varme AS to supply power transmission stations and advance the expansion of district heating for Tromsø, a Norwegian utility company. According to Dover, the target for 96% of all district heating in Tromsø is to be generated from renewable energy sources by 2023, with the remaining 4% being generated from electricity.
On the charts, Dover Corporation stock has more than doubled in the past 12 months. The stock hit a record high of $ 138.19 on March 18, offering a forward dividend of $ 1.98 and a dividend yield of 1.46%. Despite the stock’s year-over-year outperformance, six out of nine analysts are maintaining a tepid “hold” rating, so a round of upgrades could be made to keep the wind in the background of the security.
Basically, there is a significant risk associated with buying Dover stock. While the company’s sector has great growth potential with its commitment to renewable energy, Dover’s specific fundamentals don’t seem stable and consistent. Dover’s balance sheet shows total debt of $ 3.3 billion, which significantly outweighs $ 513 million in cash. Income has fluctuated annually from growth to decline since at least the 2017 financial year. Most recently, DOV revenue declined about $ 450 million, or 6.4%, in fiscal 2020.
The bottom line was Dover net income of around $ 6 million, bringing net income for fiscal 2020 to $ 683 million. Dover stock also has an attractive price-earnings-ratio of 19.12, although it is currently trading at a slightly high price. Overall, Dover stock is fascinating from a risk-reward perspective. Investors should watch Dover as a speculative game. Dover stock could see significant growth once it becomes a little more consistent from a fundamental standpoint.