United-Guardian (NASDAQ: UG) has a history of returning significant cash to investors through dividends. UG has recently increased its semi-annual dividend by 19% to $0.50 per share, yielding above 5%. In addition to the regular dividend, the company has also announced a special dividend of $0.50 per share, representing the management confidence in cash generation and future fundamentals.

United-Guardian operates in the household products industry with strong penetration in key products, including personal care products, cosmetic ingredients, medical lubricants, pharmaceuticals, specialty industrial products and healthcare products.

The company posted year over year sales growth of 21% to $13,434,460 in 2017, while its earnings increased 49% $0.84 per share. The double-digit sales growth was due to the 40% growth in sales of cosmetic ingredients and 18% boost in pharmaceutical product sales.

The substantial growth in Lubrajel and Renacidin product sales were the major contributors to overall sales growth. United-Guardian has also retained a web consultant to expand sales growth through marketing efforts.

“With some of our new “natural” cosmetic ingredients being actively promoted globally right now, as well as additional “natural” products in varying stages of development, we are optimistic that we will be able to expand sales of both our cosmetic ingredients and Renacidin further as the year progresses,” its CEO said.

United-Guardian share price rose 26% in the last twelve months to $19 at present. UG stock has the 52-week trading range of $13.75 – $21.33 and its market capitalization stands around 87 million.

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Its shares are trading around 23 times to earnings and 5.7 times to book value, compared to the industry average of 21 and 3.08 times, respectively. Although its valuations are higher than the industry average, the potential double-digit growth in sales and earnings are the catalysts for its stock price growth. The company has also been enhancing trader’s confidence through increasing cash returns.

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