10 Fresh Higher Dividends and Buybacks That Should Not Be Overlooked
The trend has been around for years: companies reward their shareholders by paying out dividends or buying back stock. Some companies do both. But what stands out the most is when companies keep raising their dividends or when they keep buying up their stock and keep renewing additional stock buyback plans.
24/7 Wall St. has compiled a list and reviewed several key dividends and stocks buyback plans that have been announced recently. We have offered links to those dividends and buybacks we have covered in more detail.
With this being the dog days of summer, it is actually very easy to overlook some of the great news that has come out of some key companies. Despite Russia-Ukraine tensions and despite new Iraqi developments, the U.S. stock market has challenged all-time highs yet again.
Altria Group Inc. (NYSE: MO) announced on Thursday that its board of directors had voted to increase its quarterly dividend by 8.3% to a new total of $0.52 per share. This is up from the previous dividend of $0.48. Altria’s yield is 4.9%, based on its August 21 closing price of $42.46. This is nothing new to Altria, which has increased its dividends 48 times in the past 45 years. As we noted, Altria still greatly under-yields ATT — should telecom or tobacco have higher dividends?
Bank of America Corp. (NYSE: BAC) may have had fresh news of a $16.65 billion settlement with the U.S. Department of Justice and other states and agencies. What has been somewhat forgotten about was that the Federal Reserve approved its new and revamped capital allocation plan on August 6. This allows for Bank of America to lift its dividend of $0.01 all the way to $0.05. The new yield jumped to 1.3% from about 0.25% at the time. Our take: this was just the first step of a return to normalcy for Bank of America.
Brinker International Inc. (NYSE: EAT) announced on August 21 that it was raising its dividend by roughly 17% to $0.28 per share. Its board also authorized an additional $350 million in share repurchases, which was said to now bring the total share repurchase authorization to approximately $3.9 billion over time. This takes a 1.9% yield up to 2.3%, and we would point out that the market cap was almost $3.2 billion.
GNC Holdings Inc. (NYSE: GNC) has been having a very rough year, but word recently surfaced that the company’s brand new non-executive chairman spent more than $1 million buying shares on the open market. What had been released previously was that GNC recently authorized another multiyear $500 million stock buyback plan, replacing the prior $500 million plan, under which it had spent approximately $250 million already. This compared to GNC’s market cap of about $3.35 billion.
Green Plains Inc. (NASDAQ: GPRE) announced that its board of directors has approved a share repurchase program of up to $100 million. The board of directors instituted a quarterly cash dividend of $0.08 per share on the ethanol maker’s common stock. This new cash dividend represents a 100% increase from the previous quarterly cash dividend. The market cap for the company is $1.65 billion.
International Flavors & Fragrances Inc. (NYSE: IFF) announced on August 4, along with 4% sales growth and 8% operating profit growth, that its board had authorized a 21% increase in the quarterly dividend to $0.47 per share (up from $0.39). The company said that its quarterly dividend payment will have grown by a compounded annual growth rate of 15% over the past four years. The 1.5% current yield now will jump to about 1.85% for new investors.
Intuit Inc. (NASDAQ: INTU) released earnings in August that were not the most straightforward we have seen. Still, it offered up guidance out to 2017. What was not discussed much was its ongoing buyback plan and a dividend hike. Intuit said that it repurchased $152.5 million of shares in the fourth quarter and that about $1.9 billion remains on the authorization, versus a market cap of $24 billion. The annualized dividend jumped to $1.00 from $0.76, based on a new $0.25 quarterly payout. The old yield being just shy of 1% was not very impressive, but the path to more hikes is likely because Intuit said the hike reflects “a large and growing cash position, as well as more recurring and predictable revenue streams.”
Sally Beauty Holdings Inc. (NYSE: SBH) authorized a new $1 billion share repurchase program for its common stock, which would terminate the previous plan. As of June, the previous plan had spent $546 million of a budget of $700 million for repurchases. Since May of 2012, the company is said to have repurchased more than $1 billion worth of common stock. Sally Beauty has a market cap of $4.3 billion.
Weyerhaeuser Co. (NYSE: WY) announced on August 13 that its board of directors had approved a 32% dividend increase for its common stock, up to $0.29 per share from a prior $0.22 payout. The timberland giant has been a real estate investment trust since 2010. Additionally, the board has authorized a new share repurchase program of $700 million of the company’s common stock. This new program will replace the previous repurchase authorization. Weyerhaeuser’s market cap is $18.1 billion.
Williams Companies Inc. (NYSE: WMB) announced on August 21 that its board raised the dividend by 32% to $0.56 per share. What investors need to know here is that this is on the heels of the July 1 acquisition of controlling interests in Access Midstream Partners, as well as the decision to accelerate a planned shift to a pure play GP holding company. If you add them up, the company showed that this was an increase of $0.193, or 52.9% higher, from the third-quarter 2013 dividend. The new yield jumps up to 3.8%, based on a $58.32 share price for new investors.