In an attempt to boost shareholder value,
Legg Mason, Inc.
) board of directors approved an increased quarterly cash
dividend on its common stock. The new dividend of 13 cents per
share reflects an 18% increase from the prior dividend of 11
cents. The new dividend will be paid on Jul 8 to shareholders of
record as of Jun 11.
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The dividend raise is part of Legg Mason's commitment to increase
shareholders' wealth. The company is effectively deploying
capital through share repurchase and dividend hike. In fact, Legg
Mason has been increasing its dividend consistently since 2010.
Prior to this revision, in Apr 2012, the company announced a
37.5% hike in its dividend to 11 cents. Previously, in Jun 2011,
Legg Mason raised its dividend by 33.3% to 8 cents. Moreover, in
2010, the company hiked its dividend twice, in June and in
We believe that Legg Mason has the potential to outperform its
peers in the long run, given its diversified product mix and
leverage to the changing market demography. However, in the near
term, asset outflows will remain a significant headwind.
However, we foresee improved operating efficiencies for Legg
Mason from its restructuring initiatives and cost-cutting
Legg Mason is expected to announce its results for the fiscal
fourth-quarter (ended Mar 31) on Apr 30. The Zacks Consensus
Estimate for the quarter is 58 cents per share. The Zacks
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) for Legg Mason is +16.97%. This, along with its Zacks Rank #3
(Hold), makes us confident of a positive earnings surprise.
Other asset managers that are performing better than Legg Mason
Apollo Global Management, LLC
Virtus Investment Partners, Inc.
Waddell & Reed Financial Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).