Stryker Ups Its Dividend by 50%

On Friday Stryker Corp. (SYK) announced the company's dividend payment would be transitioned to a quarterly dividend from an annual one. In order to accommodate this change, SYK will pay a 10 cent fourth quarter dividend for 2009.

• This will bring total 2009 dividends to 50 cents per share versus 33 cents per share paid in 2008. This represents a 51% increase in the dividend on a year over year basis.

• Further, the company will begin paying a 15 cent per share quarterly dividend beginning in the first quarter of 2010. If the 2009 dividend is spread over four quarters (12.5 cents per quarter), the 2010 quarterly dividend will represent a 20% increase over the 2009 estimated quarterly dividend.

• The payout ratio based on estimated 2009 earnings per share of $2.94 will be about 17%.

• The company has an S&P Earnings & Dividend Quality Ranking of A+.

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Comments

[David Van K...:]

Good positive move by Stryker, but at a yield of just over 1%, it's not really a candidate for a dividend-focused strategy. The fact that they raised the dividend so much, however, suggests that management has much confidence in the company's future.

Nov 01 09:30 AM

[GimliJan:]

Yeesh! 1%? A CD pays more than that!
I would recommend Duke Energy instead. Excellent 3rd Qtr results and lots of cash. Dividend yield over 6%. Hmmm...oh yeah, they are modernizing serveral of their coal plants to meet new stringent emission requirements, they are investing in Wind, Solar and Smart Grid upgrades and have two rate hikes in Ohio and the Carolina's coming up in front of the rate commissions. I am still performing my due diligence but I like this stock at $15.82 or lower. A much better return on your investment than Stryker.

Nov 01 11:13 AM

[margel:]

The point is not the size of the dividend. But an increase of that magnitude says that management is optimistic about the future and expects the company to start growing again. I take that as a very positive sign.

Nov 01 03:38 PM