Leading fashion apparel, cosmetics and home furnishings
) recently increased its quarterly dividend by 20.0%, nudging up
a penny to 6 cents per share and thus bringing the annual
dividend to 24 cents.
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The new dividend will be paid on the Class A and Class B common
stock on Nov 14, 2013 to shareholders record as of Sep 30, 2013.
Dillard's has always been committed to creating value for its
shareholders by returning capital in the form of dividends and
share repurchase programs. On Mar 25, Dillard's declared a new
share buyback plan. The new open-ended share repurchase
authorization permits Dillard's to buy back a maximum of $250
million of its Class A shares. Under the authorization, the
company can repurchase its shares from either the open market or
through privately negotiated transactions.
The company's strong balance sheet and cash flow provide
financial flexibility in shareholder-friendly moves, and store
and online business expansions. During the first half of 2013, it
shelled out $114.7 million on share repurchases and $2.3 million
on cash dividends. The company generated operating cash flow of
$131.7 million, while cash and cash equivalents were $113.7
million as of Aug 3, 2013.
Increasing the dividend has been a common move for companies
having a stable cash position and healthy cash flow. Notably, a
number of other firms have raised their quarterly dividend
payouts in the past one month. Such companies include
Union Pacific Corp.
Education Realty Trust Inc.
Arch Coal Inc.
). Education Realty and Arch Coal both raised their quarterly
dividends by 10% while Union Pacific increased its payout by
We believe that dividend payments and share repurchases also
raise the market value of the stock. Through dividend payments,
companies bolster investors' confidence, persuading them to
either buy or hold the scrip instead of selling.
Currently, Dillard's carries a Zacks Rank #4 (Sell).