Illinois Tool Works Inc.
) in an attempt to impress its shareholders announced an increase
in its quarterly dividend rate along with the approval for a new
share buyback program. The announcement was made on Aug 2, 2013.
The new dividend rate has been fixed at 42 cents, an increase of
10.5% or 4 cents over the previous rate of 38 cents and will be
paid on Oct 8, 2013 to shareholders of record as on Sep 30, 2013.
The annual dividend rate now stands at $1.68 per share.
In Aug 2012, Illinois Tool made a similar announcement of a 6.0%
rise in dividend rate surging from 36 cents to 38 cents.
Besides revision in quarterly dividend rate, Illinois Tool also
received approval for a new $6 billion share buyback program,
under which the company can repurchase roughly 81 million shares
over time. This program is in addition to the company's previous
$4.0 billion buyback program that has roughly $1.2 billion
authorization left as on Jun 30, 2013.
Consistent dividend payments with occasional increases and share
buybacks have been Illinois Tool's favored mode of rewarding its
shareholders over time. If we steal a look into the results of
the company's first half of year 2013, we find the company paid
$171 million in dividends and repurchased shares worth $676
Apart from the capital deployment actions of Illinois Tool, a
brief discussion on the financial results of the company's second
quarter 2013 is also given below:
Illinois Tool's earnings per share for the quarter came in at
$1.08, up 5.9% year over year but a cent below the Zacks
Consensus Estimate. Revenue plummeted 5.5% due to Decorative
Surfaces divestiture, excluding which it grew 1%. Results in
North America and Europe were weak, while China and Brazil
recorded impressive growth. Lower cost of sales and SGA expenses
along with 60 basis points contribution from the enterprise
initiatives led to operating margin growth.
The Zacks Consensus Estimate for Illinois Tool currently stands
at $4.20 for year 2013 and at $4.66 for 2014, representing 2.8%
and 10.9% year over year growth, respectively.
Illinois Tool Works is one of the leading manufacturers of
industrial products and equipment. The stock currently has a
Zacks Rank #3 (Hold). Other stocks to watch out for are
EnPro Industries, Inc.
), each with a Zacks Rank #1 (Strong Buy).
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