In its efforts to share more profit with its shareholders, the
board of directors of
) recently approved a 300% increase in the quarterly dividend.
The company will now pay a quarterly dividend of 10 cents per
share, up from 2.5 cents paid on Dec 26, 2013.
The increased dividend will be paid on Apr 25, 2014 to
shareholders of record on Mar 28. Based on the closing share
price of $75.94 on Feb 18, 2014, the new dividend implies a
dividend yield of 0.53%.
Though this substantial hike came after a hiatus of three
years, the news failed to move the investors' sentiments as the
company's stock price decreased 0.6% on the day, likely because
of the company's still poor dividend yield. Even after the hike,
Danaher's yield is almost half of the industry average of 1.10%.
Its previous dividend increase took place on Sep 28, 2011,
when it was raised to 2.5 cents from 2 cents per share.
This recent dividend hike is supported by its robust cash
balance and its ability to generate healthy cash flow, which in
turn, is attributable to its continuing effectiveness of the
Danaher Business system. While cash and equivalents balance
surged 82% year over year to $3.1 billion at 2013 end, cash from
operations in 2013 also increased 5.0% to $3.6 billion. The
company's retained earnings also stood solid at $18.0 billion,
increasing 16.9% year over year, reflecting its capacity to pay
even higher dividends.
With approximately 713.8 million shares outstanding at fourth
quarter end, the company needs to dish out $285.5 million
annually as dividend. The strong financial position will well
cushion the payout.
Another stock in the diversified operations industry that was
in the news for raising its dividend is
). The company hiked its quarterly dividend from 63.5 cents to
85.5 cents per share on Feb 12, 2014, reflecting a high dividend
yield of 2.59%.
Danaher currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks that can be considered at the moment include
Hutchison Whampoa Ltd
), both of which have a Zacks Rank #2 (Buy).
DANAHER CORP (DHR): Free Stock Analysis
HUTCHINSON WHAM (HUWHY): Get Free Report
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