Leading rent-to-own operator,
), announced a 13.3% increase in its quarterly dividend rate.
Consequently, the company will now be paying a quarterly dividend
of 17 cents per share, up from 15 cents per share.
This brings the annual cash dividend of Aaron's to 68 cents per
share, compared with 60 cents paid earlier. Considering the
closing share price of $30.01 on November 7, 2012, the enhanced
dividend translates into a dividend yield of 2.3%, considerably
higher than the current yield of arch rival,
), which stands at 1.9%.
The increased dividend will be paid on January 4, 2013 to
shareholders of record as of December 3, 2012.
This announcement marks Aaron's seventh successive yearly
dividend hike. Prior to this, the company had raised its
quarterly dividend rate by 15.4% to 15 cents per share on
Aaron's policy of raising dividends annually points towards the
company's strong growth trend as well as financial performance.
Last month, Aaron's reported solid third-quarter 2012 adjusted
earnings per share of 46 cents, surging 28% from 36 cents
recorded in the year-ago quarter, driven by robust top-line
The company's cash and cash equivalents at Aaron's as of
September 30, 2012 were $155.6 million and total shareholders'
equity was $1,092.4 million. During the first nine months of
2012, the company generated over $86.0 million in cash flow from
Looking ahead, the company remains confident of its future growth
prospects, suggesting enhanced value for shareholders via
dividend payout as well as share buybacks. As of the end of the
third quarter, Aaron's had nearly 4,044,655 shares remaining
under its share repurchase authorization.
Currently, Aaron's holds a Zacks #1 Rank, implying a short-term
Strong Buy rating on the stock. Moreover, the company maintains a
long-term Outperform recommendation on the stock.
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