Last week, Fox Business declared that 2010 would be the year of the dividend. After suffering through 2009, dividend investors are now expecting companies to refocus on their dividend payments again. The economy is showing strong signs of improvement with fourth quarter GDP growing at its fastest pace since 2003. Strong earnings reports over the last couple of weeks seem to further confirm that business conditions are improving.
Dividend stock investors should be optimistic over several announcements this week of companies restoring or increasing their dividend payments. eDividendStocks.com has highlighted six big dividend announcements that have taken place over the last 7 days.
Time Warner Cable
Time Warner Cable announced yesterday that it was initiating a quarterly dividend. The media company will pay $.40 cash per share each quarter, giving the stock a current yield of 3.6%.
The dividend will be payable on March 15, 2010 to stockholders of record as of the close of business on February 26, 2010.
Time Warner Cable Chief Executive Officer Glenn Britt said: "We believe that cash generating businesses like ours should return capital to shareholders. This regular dividend demonstrates our confidence in our business - in our strategy, our operational discipline and the free cash flows we expect to generate. As a starting point, our current dividend delivers a significant yield, yet it also provides us the flexibility to invest in organic growth as well as consider strategic acquisitions and additional means of returning capital to shareholders over time."
Tellabs announced on January 26th that that telecom firm will initiate a quarterly dividend of $.02 per share. While the dividend yield is still modest at 1.2% it reflects a shift in management strategy to start distributing some of their cash back to shareholders.
The cash dividend is payable on February 26, 2010 to shareholders of record as of the close of business on February 12, 2010.
Rob Pullen, Tellabs president and chief executive officer said, “to return capital to shareholders, today we’re announcing the company’s first cash dividend. It’s based on our confidence that Tellabs will continue to generate ample cash from operations to invest in the growth of our business, repurchase shares and pay dividends. We are helping customers succeed by preparing their packet and optical networks for growth markets such as the mobile Internet.”
Family Dollar Stores
Late last week, Family Dollar Stores announced that they will increase their quarterly dividend by 14.8%. FDO will now distribute $.155 per share in cash each quarter giving the discount retailer a 2% dividend yield.
The cash dividend is payable on April 15, 2010 to shareholders of record as of the close of business on March 15, 2010.
The dollar store operator has seen their business thrive in the recent economic downturn as consumers flocked to lower-priced outlets. The company has a long history of distributing cash back to their investors and this will mark the 34th consecutive year that the company has increased their dividend.
"Increasing our dividend for the 34th consecutive year reflects our strong financial position and our confidence in the long-term growth opportunity for Family Dollar," said Howard R. Levine, Chairman and Chief Executive Officer.
Newspapers stocks have been battered over the last couple years as declining subscriptions as vanishing advertising revenue has depleted their business. Many of these firms have eliminated (McClatchy) or greatly reduced (Gannet) their dividends. However, the Washington Post Company announced last Thursday that they will increase their annual dividend rate, from $8.60 to $9.00 per share.
The dividend for the first quarter of 2010, will be payable on February 5, 2010, to shareholders of record on January 27, 2010.
Tiffany & Co.
High-end retailer, Tiffany & Co. also is increasing their quarterly dividend. The company announced last Thursday that they will increase their dividend payment by 18% beginning in April.
The company will now pay out $.20 per share each quarter, giving the stock a current yield of 2%.
Michael J. Kowalski, chairman and chief executive officer, said "Last week, we were pleased to report a better-than-expected 17% increase in Holiday sales and we raised our outlook for 2009 earnings. Both of these actions today reflect Tiffany's strong balance sheet liquidity, as well as the Board's confidence in our long-term ability to generate solid growth in earnings and cash flow."
Finally, cruise operator Carnival that they will resume paying a quarterly dividend. The firm had previously suspended their dividend payment last March.
The dividend will be payable on March 12, 2010 to shareholders of record as of the close of business on February 19, 2010.
The company will now offer a quarterly dividend of $.10 per share giving Carnival a current dividend yield of 1.2%.
"Resuming the quarterly dividend demonstrates our confidence in the earnings power of our global cruise brands despite the current economic environment. In addition, there has been a notable improvement in our access to the capital markets since the suspension was announced at the height of the financial crisis. Initiating the dividend at this level allows us to begin to return cash to shareholders at the peak of our capital expenditure program in 2010 and still maintain our strong balance sheet and solid investment grade credit rating. We are committed to returning cash to shareholders and expect to grow the dividend as our capital investment program slows beyond 2010 leading to significant free cash flow," said Micky Arison, Carnival Corporation & plc chairman and CEO.
Of course we are still seeing some stocks, like Valero Energy, reduce their dividends. However, dividend investors should be optimistic as we enter 2010 as we anticipate seeing dividends become more of a focus for companies as the economy continues to improve.
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