Time Warner Cable Inc. (NYSE: TWC) has reported that its fourth quarter earnings came in at $1.39 EPS and on roughly $5 billion in sales. The consensus target from Thomson Reuters was $1.20 EPS on $4.97 billion in sales. On top of earnings, the #2 cable giant went shareholder-friendly in its efforts to entice new shareholders and retain existing shareholders.
The company announced a new $4 billion as a share repurchase authorization plan. For income investors, Time Warner Cable also juiced up its dividend by about 17 percent or so to a quarterly payout of $0.56 now. The prior dividend yield was already elevated at 2.8% but the new dividend rate of $2.24 on an annualized basis and with a $69.11 share price generates a new dividend yield of almost 3.25%.
The market cap is $22 billion and the 52-week range is $57.15 to $80.86. This sets the bar higher for a situation that has been considered a bit of a “muddle on” strategy as many consumers choose between subscription services for television in the form of satellite or the telecom providers at the same time that the cable companies now offer telecom and alarm services.
The dividend game here is getting close enough to being a utility if share prices do not adjust much higher.
JON C. OGG
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