Dividends Keep Inching Upwards

Among quite a few dividend raises this quarter, following were few selected ones that I was have been reading about as potential dividend growth opportunities.

Verizon Communication (VZ): The 2Q09 earning per share was $0.52 (vs. $0. in 1Q09).

  • The key highlight was reduced earnings on y-o-y basis (vs. $0.66 in 1Q08).
  • There was y-o-y growth in operating revenue (11.3%) and free cash flow.
  • Quarterly dividend of $0.46/share is barely getting covered with earnings. This quarter’s payout ratio is at 88%.

Kellogg Company (K): The 2Q09 earning per share was $0.92 (vs. $0.84 in 3Q09).

  • The highlight was 12% increase in EPS on y-o-y basis.
  • Increased EPS seems to be due to controlled operating expenses that includes cost cutting initiatives.
  • Quarterly dividend of $0.375/share is well covered with earnings. This quarter’s payout ratio is 40%.

Medtronic (MDT): The year 2009 earnings per share was $1.93 (vs. $1.95 in 2008).

  • The highlights were increased revenue (8%), and free cash flow.
  • Annual dividend of $0.82/share is well covered with earnings. The annual payout ratio is 42%.
  • MDT is a dividend achiever. The most recent dividend increase was 9% in July 2009.

John Wiley & Sons (JA.A): The year 2009 earnings per share was $2.15 (vs. $2.49 in 2008).

  • The key highlights were growth in revenue (3.4%), free cash flow (40%), and EPS (22%) with currency neutral. The reduction in EPS was due to currently fluctuations. Decreased debt by 10%.
  • Annual dividend of $0.56/share is very well covered. The annual payout ratio is 26%.
  • JA.A is dividend achiever. The most recent dividend increase was 8% in July 2009 and is its 16th consecutive dividend increase.

These are few ones that I will be presenting my analysis in next few weeks. In this John Wiley and Sons gave me a surprise by low payout ratio, 8% increase, and 16th consecutive increase.

2 Responses to “Dividends Keep Inching Upwards”

  1. Mike says:

    Ouch to Verizon’s payout ratio. I recently added T to my holdings, and debated VZ in its place. Only time will tell if I made the right decision, but I don’t like 88% payouts for sure.

    • Mike,

      88% is just a quarterly payout factor. I look at it as something to keep an eye for, and not necessarily get alarmed at this point. More so because there are only two big players in this domain.

      Best Wishes,

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