Consistency means never having to send Pitney Bowes (NYSE:PBI) a Dear John letter -- even if you were to do so through metered mail. The leader in postage meters and other mailing services posted -- pun intended -- steady and true improvement as third-quarter revenue climbed by 7% while earnings per share rose by 16%.
Through committed consistency, the company was able to generate $149 million in free cash flow during the period. That gave it more than enough elbow room to buy back nearly a million more shares as it continues to invest in itself.
Back in February, Mathew Emmert recommended the company in our Income Investor newsletter. It's easy to see why as the company is a cash machine that has been paying out dividends without fail since 1934. While the stock's 2.9% yield may be on the low side of the chunky payout producers that Mathew's newsletter usually singles out, he was impressed with the company's knack for accretive acquisitions and its prospects in an improving economy.
There was a time when some were saying that email would make snail mail obsolete, but those paper cuts on your fingers tell a different story. And it's not as if Pitney Bowes is old-fashioned. In fact, earlier this year it teamed up with eBay (NASDAQ:EBAY) to provide online postage solutions for its eBay and PayPal users. So while you may not see FedEx (NYSE:FDX) or UPS (NYSE:UPS) biting their collective nails, Pitney Bowes has rolled with the changes and is now a more diversified mailing services provider.
The company is looking to earn between $0.66 and $0.68 a share in the current quarter. At 18 times this year's profit targets, that doesn't exactly make Pitney Bowes cheap. In fact, it's just a few good trading days away from the $45 mark that Mathew established for the company earlier this year. Yet the company's dependable performance and its refreshing dividend make Pitney Bowes a pretty decent prospect for shareholders who don't mind being paid as they wait on their investments.
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Longtime Fool contributor Rick Munarriz is not intimidated by a postage meter. He does not own shares in any company mentioned in this story.
