Carlisle Companies: A Mid-Cap Dividend Aristocrat with a History of Staying Power

October 24, 2022
STRATEGY Dividend Growers
Learn More
The Dividend Aristocrat brand is well known to investors who seek to invest in high-quality companies with the longest records of consistent dividend growth. However, many investors intuitively associate dividends with large-cap stocks, especially prominent brands with products they consume regularly. After all, household names like Coca-Cola, Procter & Gamble and Johnson & Johnson have been growing their dividends for more than 50 consecutive years.
 
What’s often missed is that similar dividend longevity exists in mid-cap stocks. The names may be less familiar, but mid-cap companies’ dividend records can be just as impressive.
 
  • The S&P MidCap 400® Dividend Aristocrats® Index is a group of quality companies that have grown their dividends for at least 15 consecutive years.

  • Carlisle Companies Incorporated (NYSE: CSL) is a member of the S&P MidCap 400® Dividend Aristocrats® that has grown its dividend for more than 45 years.

Get to Know Carlisle

Tracing its roots to 1917, Carlisle Companies Incorporated evolved into an industrial conglomerate with business units ranging from food service products to automotive brakes. CSL is perhaps best known today as a premier provider of building products, which drives over 80% of the company’s revenue. The company’s products include roofing materials, rigid insulation and architectural metal for commercial, industrial and residential construction.
 
CSL’s recently released fiscal second quarter results1 demonstrate what makes it a quality business typical of a mid-cap Dividend Aristocrat.
 
  • Year-over-year revenue growth was 57% (including 42% organic), and adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) growth was 146%.
  • Adjusted earnings grew 185% year over year, and operating margins increased to over 22%, despite high inflation.
  • CSL’s most recent quarterly distribution marked 46 years of consecutive dividend growth. Its 39% increase was the company’s largest dividend increase in 25 years, indicating management’s high confidence in the future growth of the business.

  • The company’s dividend growth rate over the most recent 10-year period was 11.8%.

Sustainable Growth Prospects

How has Carlisle Companies produced such sustainable, strong growth? Some of it has come through synergistic acquisitions, like its recent purchase of Henry, a provider of building envelope systems that improve energy efficiency.
 
More is coming through organic means, like increasing volumes and favorable pricing trends driven by strong demand for its roofing and insulation products. Either way, CSL’s growth may be sustainable.
 
  • It is estimated that greater than 30% of annual greenhouse gas emissions come from residential and commercial use.2
  • To meet many countries’ ambitious climate targets, there is increasing demand for more energy-efficient products, which is one of Carlisle’s areas of expertise.
  • The company’s Polyiso wall and roofing insulation products avoid 34 tons of CO2 over the life of the product.
  • CSL’s spray-foam insulation reduces energy usage in buildings by as much as 40%.

In short, the type of energy-efficient building product solutions provided by Carlisle Companies may be in demand for decades to come.

A History of Strong Performance

Carlisle’s strong fundamentals and consistent growth over time have helped the company deliver noteworthy total shareholder returns.
 
In addition to producing returns of over 17% (year to date, through 9/19/22), CSL has outperformed the S&P 500 over the trailing one-, three-, five-, 10- and 20-year periods through 8/31/22.3

Dividend-Growers-Carlisle-Spotlight-Chart_Web.jpg

Source: Bloomberg. Data from 8/30/91‒8/31/22.

The Takeaway

Investors value Dividend Aristocrats for characteristics like stable earnings, solid fundamentals and strong histories of profit and growth. But they shouldn't limit themselves to investing in large-cap stocks to find companies with enviable dividend growth records, durable business models and competitive advantages. Carlisle Companies Incorporated is a great example of a high-quality company with sustainable growth prospects—and what it means to be a S&P MidCap 400 Dividend Aristocrat.

Explore more of the elite companies of the Dividend Aristocrats with the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL).

1Sources: Carlisle Companies Incorporated press releases, FactSet
2Source: U.S. Environmental Protection Agency (2022). Inventory of U.S. greenhouse gas emissions and sinks: 1990-2020. https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions
3Source: Bloomberg

 

Get the latest perspectives and updates.

As of 10/17/22, REGL included a 2.38% allocation to Carlisle Companies Incorporated. Holdings are subject to change.

Any forward-looking statements herein are based on expectations of ProShare Advisors LLC at this time.

The performance quoted represents past performance and does not guarantee future results. Index information does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged, and one cannot invest directly in an index.

There is no guarantee any ProShares ETF will achieve its investment objective.

Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Your brokerage commissions will reduce returns.

Investing involves risk, including the possible loss of principal. This ProShares ETF is diversified and entails certain risks, including imperfect benchmark correlation and market price variance, that may decrease performance. Please see summary and full prospectuses for a more complete description of risks.

Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.

The "S&P MidCap 400® Dividend Aristocrats®" Index is a product of S&P Dow Jones Indices LLC and its affiliates and has been licensed for use by ProShares. "S&P®" is a registered trademark of Standard & Poor's Financial Services LLC ("S&P") and "Dow Jones®" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones") and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates. ProShares have not been passed on by S&P Dow Jones Indices LLC and its affiliates as to their legality or suitability. ProShares based on the S&P 500 Dividend Aristocrats Index are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and they make no representation regarding the advisability of investing in ProShares. THESE ENTITIES AND THEIR AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.

ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds’ advisor or sponsor.

Your use of this site signifies that you accept our Terms and Conditions of Use.