McGraw Hill Financial, Inc.
) is an intriguing option for investors seeking both growth and
income, as the shares of this financial information provider rose
1.4% after the company announced a dividend hike on Jan 29, 2014.
The news of the dividend hike reflects this Zacks Rank #2 (Buy)
stock's plan of utilizing free cash to enhance shareholders'
return, thereby boosting investors' confidence in the stock.
The N.Y. - based company, raised its quarterly dividend by
7.1% to 30 cents (or $1.20 annually) from 28 cents a share (or
$1.12 annually). The increased dividend will be paid on Mar 12,
2014, to stockholders of record as of Feb 26. The dividend yield
based on the new payout and the last closing market price is
In Jan 2013, the company last increased its quarterly dividend
by 9.8% to 28 cents. Other companies that recently increased
quarterly dividend include
Enterprise Products Partners L.P.
Family Dollar Stores Inc.
). The companies raised their dividends by 6.1% to 70 cents and
19.2% to 31 cents, respectively. Another company,
Omega Healthcare Investors Inc.
) recently hiked its dividend by 2.1% to 49 cents.
McGraw-Hill started distributing dividends way back in 1937.
Since 1974, the company has boosted its dividend at a compound
annual dividend growth rate of around 9.5%, and now counts among
the S&P 500 companies (less than 25), which have raised
dividend annually for the 41 years straight. Since 2011, the
company has returned over $4 billion to stockholders via
dividends and share buybacks, comprising approximately $1.3
billion paid in 2013.
Dividend hikes not only enhance shareholder's return but raise
the market value of the stock. Through this strategy, the
companies bolster investor confidence in the stock, thereby
persuading them to either buy or hold the scrip instead of
A dividend hike primarily reflects the company's sound
financial position and defined future prospects. This is quite
evident from McGraw-Hill's balance sheet and cash flow positions.
The company ended the third quarter of 2013 with cash and
equivalents of $1,577 million, and generated free cash flow of
$388 million during the nine-month period.
ENTERPRISE PROD (EPD): Free Stock Analysis
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