Dunkin' Brands Unveils First Dividend Hike


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Dunkin' Brands Group ( DNKN ), the franchiser of Dunkin' Donuts and Baskin-Robbins chains, is known for its sweet treats. On Thursday, the company sweetened its payout for shareholders.

The Canton, Mass.-based company raised its quarterly dividend by 27% to 19 cents a share, up from 15 cents. Dunkin' Brands will disperse the payout Feb. 20 to shareholders of record on Feb. 11.

Because it only became a public company in July 2011, Dunkin' Brands doesn't have a long history of returning cash to shareholders through dividends. Wednesday's announcement marks its first dividend hike since it began to pay dividends in March 2012.

"We believe that our ability to increase our dividend in our second year as a public company reflects the confidence we have in our business, the sustainability of our cash flow and our commitment to enhance shareholder value," said Dunkin' Brands CFO Paul Carbone in a news release.

At its new quarterly rate, the company will pay 76 cents cents a share on an annual basis. This gives the stock an annualized yield of about 2.1%. Although this is one of the lower yields among the 18 dividend payers in the Retail-Restaurants groups, Dunkin' Brands has a Composite Rating of 93 -- one of the highest in the entire group.

Also Thursday, the company reported that Q4 earnings grew 13% to 34 cents a share, topping expectations by a penny. But revenue fell 4% to $161.7 million, missing views for $171 million. The company said the drop in its top line was mainly due to an extra week in 2011's fourth quarter and a one-time delay in recognizing sales of ice cream products. That delay stemmed from shifting some production to partnerDean Foods ( DF ), Dunkin' said.

For all of 2012, profit jumped 51% to $1.28 a share, up from 16% growth in 2011. Dunkin' Brands sees full-year 2013 earnings between $1.48 and $1.51 a share.

Dunkin' Brands bolted to an all-time high early Thursday, but ended well off its session peak. The stock cleared a 33.59 buy point from a cup-with-handle base Jan. 2 in lackluster trade. Big volume came in five sessions later. Dunkin' is now extended past the buying range created by that 33.59 entry.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance Investing Ideas
Referenced Stocks: DF , DNKN

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