) recently raised its quarterly dividend on its common stock and
on the exchangeable shares of Domtar (Canada) Paper Inc.
(UFX.TO), a subsidiary of Domtar, by a stupendous 22.0% to 55
cents per share. The dividend will be paid on Jul 15, 2013 to
shareholders of record as of June 14. Based on the closing price
of $67.48 as on May 2, the proposed payout affirms a dividend
yield of 3.3%
Domtar had earlier increased its quarterly dividend by 28.6%,
from 35 cents to 45 cents per share in Jun 2012. Prior to that,
the company had raised its quarterly dividend payout in Jun 2011
from 25 cents to 35 cents per share. For full year 2012, the
company used $61 million cash towards dividend payments.
In addition to steady quarterly dividends, Domtar returns
significant cash to shareholders through its share repurchase
program. On Dec 15, 2011, Domtar's Board of Directors approved a
share repurchase plan to buy shares up to $1 billion with no
specified deadline. During 2012, the company repurchased around 2
million shares for a total cost of $157 million.
Domtar designs, manufactures and markets fiber-based products
like communication papers, and packaging papers and adult
incontinence products. Some of its recognized brands of uncoated
fresh sheet paper in North America are Cougar, Lynx Opaque Ultra,
Husky Opaque Offset and First Choice.
Domtar currently carries a Zacks Rank #3 (Hold). We believe
that the announcement of a dividend increase will augur well for
the company and help boost shareholders' confidence.
Other companies in the industry that are worth mentioning are
PH Glatfelter Co
KapStone Paper and Packaging Corporation
Resolute Forest Products Inc.
), each carrying a Zacks Rank #1 (Strong Buy).
GLATFELTER (GLT): Free Stock Analysis Report
KAPSTONE PAPER (KS): Free Stock Analysis
RESOLUTE FOREST (RFP): Free Stock Analysis
DOMTAR CORP (UFS): Free Stock Analysis Report
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