Upscale department store operator,
) board of directors recently approved a share buyback program of
$800 million to be exhausted through Mar 1, 2015. The new
authorization is an addition to the company's existing program,
which still has $344 million outstanding, with expiration date of
Feb 1, 2014.
Concurrently, the company announced its decision to raise the
quarterly dividend by 3 cents to 30 cents per share. This
translates into an 11% hike from the prior dividend. The
increased dividend will be paid on Mar 22, 2013 to stockholders
of record as of Mar 11. Prior to this announcement, this Zacks
Rank #3 (Hold) stock had been paying a quarterly dividend of 27
cents per share.
The strength of Nordstrom's business model is reflected in its
strong cash generation capabilities and its commitment to return
value to the shareholders. We believe that continued share
buybacks and dividend hike will increase investors'
Nordstrom's strong balance sheet and cash flows provide
financial flexibility in matters of shareholder friendly moves
and store and online business expansions. During fiscal 2012, it
shelled out $725 million on share repurchases and $220 million on
cash dividends. Cash and cash equivalents stood at $1,285 million
at the end of the fiscal. We remain encouraged by Nordstrom's
strong cash position and its ability to service its long-term
Other companies that recently increased dividend include
Texas Instruments Inc.
), by 33% to 28 cents,
The Coca-Cola Company
) by 10% to 28 cents, and
) by 10% to 27.5 cents.
We believe that dividend hikes and share repurchases not only
enhance shareholder's return, but raise the market value of the
stock. Through dividend raises, companies bolster investors'
confidence, persuading them to either buy or hold the scrip
instead of selling these. Looking ahead, the company remains
confident of its growth potential, suggesting enhanced value for
shareholders via dividend payout as well as share buybacks.
GAMESTOP CORP (GME): Free Stock Analysis
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