In a bid to enhance shareholders' value,
Rockwell Automation Inc.
) hiked its quarterly dividend by 5 cents to 52 cents. This
translates to an 11% increase from the prior dividend of 47
cents. The increased dividend will be paid on Jun 10, 2013, to
stockholders of record on as of May 13, 2013.
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The increased dividend will result in a dividend yield of 2.46%,
up from the current yield of 2.20%. Rockwell enjoys a significant
benefit on this front as its peers
HollySys Automation Technologies, Ltd.
) do not pay dividends.
Rockwell Automation had previously hiked its dividend in June
last year by another 11% or 4.5 cents to 47 cents. The current
increase will cost the company about $28 million more annually.
The hike in payout reflects the company's solid financial
position and confidence in its ability to generate cash in
different business cycles.
Rockwell's cash and cash equivalent improved to 954.3 million as
of Dec 31, 2012 from $903.9 million as of Sep 30, 2012. Total
debt was $1.16 billion as of Dec 31, 2012, compared with $1.06
billion as of Sep 30, 2012. In the first quarter of fiscal 2013,
the company generated cash flow from operating activities of
$167.3 million in contrast to cash usage of $189 million in the
prior-year quarter. The company deleveraged its balance sheet
with its debt-to-capitalization ratio improving to 37% as of Dec
31, 2012 from 36% as of Sep 30, 2012.
Rockwell Automation will benefit from expansion in the emerging
markets, investment in Logix, recent acquisition of China-based
medium voltage drives business. However, uncertainty in the
global economic scenario, which can lead to cautious
capital-spending, further deterioration in the Chinese economy
and margin headwinds in the form of increased growth spending
remain concerns. The company currently retains a Zacks Rank #3
Based in Milwaukee, Wis., Rockwell Automation Inc. is an original
equipment manufacturer of industrial automation equipment,
application specific integrated software and consulting design
services. The company is a leading global provider of industrial
automation power, control, and information solutions.