) recent announcement of dividend hike did not provide any
impetus to this Zacks Rank #5 (Strong Sell) stock; instead shares
fell marginally by 0.8% to close at $33.35 on Friday as investors
remained disappointed with the company's dismal third-quarter
2013 performance. The dismal results had also compelled
management to lower its full-year earnings projection.
The Plano, Texas-based company, raised its quarterly dividend
by 10% to 23 cents (or 92 cents annually) from 21 cents a share
(or 84 cents annually). The increased dividend will be paid on
Jan 23, 2014, to shareholders of record as of Jan 3, 2014. This
is the fifteenth successive dividend.
The company's commitment toward increasing shareholders'
return reflects its free cash flow generating capability. The
dividend yield based on the new payout and the last closing
market price is 2.8%.
Rent-A-Center last hiked its quarterly dividend to 21 cents
from 16 cents in Dec 2012, reflecting an increase of
Other companies that recently increased quarterly dividend
). The companies raised their dividends by 15.8% to 44 cents and
3.6% to 29 cents, respectively. Another company,
) recently hiked its dividend by 11% to 35 cents.
Dividend hikes not only enhance shareholder's return but also
raise the market value of the stock. Through this strategy, the
companies bolster investors' confidence on the stock, thereby
persuading them to either buy or hold the scrip instead of
selling them. Looking ahead, the company remains confident of its
growth potential, suggesting enhanced value for shareholders.
Rent-A-Center offers consumer electronics, appliances and
furniture products under rental purchase schemes that allow
customers to own the merchandise upon the completion of the
rental period. Due to continued tightening of the credit market,
customers view rent-to-own as a more flexible and viable option
compared to credit. However, the sluggish recovery and a fragile
job market may make customers reluctant to enter new
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