Climate solution company, Ingersoll-Rand PLC(
) reported on Monday that they will be splitting two of their
Following the company's announcement to split two segments of
its business into two company's, IR reported that it will increase
dividend payments by 31% from 16 cents quarterly to 21 cents
quarterly. This dividend, which will equal 84 cents annually, is
set to be paid on March 28 to shareholders of record on March 12.
IR has an ex-dividend date of March 8 on the stock.
The company plans to split the commercial and residential
security businesses in a year, which will be tax free to
shareholders. With this split, the company plans to combine its
residential security business with its commercial security business
to establish a leading global safety and services provider.
There are high expectations for the new company, which is
expected to have a strong cash flow and financial flexibility. It
is expected that this new company will have opportunities to
expand, with its strong margins and brand recognition.
With the split, the company will also start a share repurchase
plan of $2 billion in 2013, which will continue through 2014. The
plan will occur with several methods, including open market
Ingersoll-Rand shares were up $1.41, or 2.90% during premarket
trading Monday. The stock is up 62% YTD.
The Bottom Line
Shares of Ingersoll-Rand (
) will now have a 1.73% dividend yield, based on the higher
dividend payout and Friday's closing stock price of $48.69. The
stock has technical support in the $42-$44 price area. The stock is
trading near the all-time high range of $50-$54 a share.
)is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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