Last year it seemed as if the financial headlines almost daily carried new announcements of dividend reductions or eliminations. Firms were striving to maintain profitability in the face of declining revenues by reducing their cost structure. Of course this meant reducing or eliminating dividend payments, reducing marketing expenses and massive layoffs.
This year the headlines seem to be more bullish with many companies announcing that they are raising their dividends or reinstituting dividend programs that were eliminated during the recent recession. eDividendStocks.com has highlighted five big dividend announcements that income investors should take notice of.
Time Warner (NYSE:TWX)
After shedding AOL, Time Warner reported strong fourth quarter results and announced yesterday that they will increase their quarterly dividend by 13% in 2010.
Following a 35% increase in OIBDA in the fourth quarter, Time Warner announced they will increase their annual dividend from $.75 to $.85 per share. With the dividend increase, Time Warner now offers investors a current dividend yield of 3.1%.
The dividend will be payable on March 15, 2010 to stockholders of record as of the close of business on February 28, 2010.
News Corp (NASDAQ:NWS)
News Corp is one of the few media firms seeing strong top-line growth and investors will receive some of the benefit of that growth. News Corp will increase their dividend by 25%.
With the dividend increase, News Corp will distribute $.075 per share to stockholders of their Class A and B shares.
Chairman and Chief Executive Officer Rupert Murdoch said,
Our strong top-line revenue growth demonstrates that News Corporation is emerging from this recession with renewed vigor and strength. Moreover, our underlying operating trends this quarter far outpace those of the same quarter last year. We continue to reap the benefits from the restructuring and cost containment measures we instituted before the downturn began and I am pleased that our unrelenting focus has translated to growth across our businesses that will reward stockholders for years to come.
The dividend will be payable on April 14, 2010 to stockholders of record as of the close of business on March 10, 2010.
L-3 Communications (NYSE:LLL)
Communication systems maker, L-3 Communications is increasing their quarterly dividend by 14%. While chasing high growth stocks over the last 15 years was exciting (at least while their stock prices were going higher), the market crash that seems to always ensue is finally taking its toll.
After posting a record $4.2 billion in sales in the fourth quarter, L-3 announced they will increase their quarterly dividend from $.35 to $.40 per share. With the dividend increase, L-3 now offers investors a current dividend yield of 1.9%.
The dividend will be payable on March 15, 2010 to stockholders of record as of the close of business on March 1, 2010.
Michael T. Strianese, chairman, president and chief executive officer stated,
our continued confidence in L-3's financial and operational strength is the catalyst for this increase to L-3's quarterly dividend. We remain committed to delivering value to shareholders through increased dividends, share repurchases and a focused, disciplined approach to acquisitions.
Hershey announced Wednesday that the company will increase their quarterly dividend by nearly 8%. This marks the first dividend increase from the chocolate maker since 2007.
Hershey hiked their dividend payment following a 49% increase in net income in the fourth quarter. With the dividend increase, Hershey now offers investors a current dividend yield of 3.5%.
David West, President and Chief Executive Officer commented:
The earnings growth, as well as the Company's continued focus on improving working capital throughout the year and in the fourth quarter, generated a significant increase in operating cash flow in 2009. Therefore, we are pleased to announce an increase to our quarterly dividend. This increase is a result of the Company's strong balance sheet and the continued ability of our business to generate consistent and predictable free cash flow.
The final stock in this feature is not really a dividend increase, but an even better signal for dividend investors. Broadcom announced that they will initiate a quarterly dividend program with an initial cash dividend of $.08 per share.
"Broadcom has become one of the world's leading communications semiconductor companies due in large part to the continued support of our shareholders," said Scott A. McGregor, Broadcom's President and CEO.
The adoption of a dividend policy is another step in our continued efforts to adopt shareholder friendly initiatives and encourage new and long-term investments in Broadcom. Adopting a dividend enables us to return cash to our shareholders, who can now benefit from a quarterly dividend payment and stock appreciation.
Broadcom's President and Chief Executive Officer commented in the firm’s fourth quarter earnings release:
Given the strength of our balance sheet and our proven ability to generate strong cash flow, Broadcom's Board of Directors today announced it has adopted a quarterly dividend policy. Broadcom has both the financial strength and flexibility to fund our research and development activities to grow our business in the future and return cash to shareholders in the form of share repurchases and a quarterly dividend.
The initial dividend yield for the semiconductor stock will be 1.2% and provides dividend investors with another technology stock to choose from.
With nearly $2 billion in cash & short-term investments on their balance sheet, the dividend announcement is good choice by management to begin redistributing that cash back to investors. Wall Street in looking for double-digit growth from Broadcom in 2010, so those cash balances will likely remain very strong.