Clorox Lifts Quarterly Dividend - Analyst Blog
14 5월 2014 - 8:00AM
Zacks
The Clorox Company (CLX), known for its
shareholder-friendly moves, once again came forward to reward
shareholders with an annual rise in its dividend rate. The company
raised its quarterly dividend by 4.2% or 3 cents to 74 cents per
share from 71 cents per share. This marks the company’s 8th
consecutive annual dividend hike since May 2007.
The new dividend will be paid on Aug 8, 2014 to shareholders of
record as of Jul 23, 2014. The hike in dividend now brings the
company’s annualized dividend rate to $2.96 per share. Based on the
current stock price, the increased dividend, results in yield of
3.4%.
Previously, on May 13, 2013, Clorox raised its dividend to 71 cents
from 64 cents per share, indicating an increase of 11%.
Clorox has been enhancing shareholder return from time to time. The
company has a track record of consistently raising dividends since
1977. Taking a decade-long view, the company has successfully
increased its dividend by nearly 236% from 22 cents paid in Jan
2003 to 74 cents announced recently.
We believe that Clorox’s consistent dividend payments and
increments reflect the growth potential of the company’s earnings
as well as its cash flow generation capabilities.
Though Clorox’s third-quarter 2014 results were slightly
disappointing when compared with the Zacks Estimate, it remained
encouraging based on prior-year comparisons. This Zacks Rank #3
(Hold) company’s third-quarter earnings came in at $1.05 per share,
missing the Zacks Consensus Estimate of $1.08 and rose 5% from the
year-ago comparable quarter.
On the other hand, Clorox ended the quarter with cash and cash
equivalents of $364 million. During the first three quarters of
fiscal 2014, the company generated $434 million of net cash from
operations against $486 million in the comparable period of fiscal
2013. The decrease was primarily due to higher tax payments and
some nonqualified deferred compensation plans.
Looking ahead, the company lowered its sales and earnings forecasts
for fiscal 2014. The company now expects sales to decline
marginally in the fiscal instead of the 1%–2% increase projected
earlier. Further, earnings per share are now expected to be
$4.25–$4.35, down from earlier forecast of $4.40–$4.55.
Other companies, which recently increased dividend, include
Whirlpool Corp. (WHR) by 25% to 62.5 cents,
The TJX Companies Inc. (TJX) by 26.0% to 14.5
cents and Rockwell Automation Inc. (ROK) by 11.0%
to 52 cents.
We believe that dividend hikes not only enhance shareholder return
but raise the market value of the stock as well. Through dividend
raises, companies persuade investors to either buy or hold the
scrip instead of selling them. Looking ahead, Whirlpool Clorox
remains confident of its growth potential, suggesting enhanced
value for shareholders via dividend payout.
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