Royal Caribbean Cruises Ltd.
) recently hiked its quarterly dividend payout by 2 cents to 12
cents per share, reflecting a 20.0% increase from the prior
dividend payout. This equates to an annual payout of 48 cents per
share. The increased dividend will be paid on October 9, 2012, to
stockholders of record as of September 25, 2012.
CARNIVAL CORP (CCL): Free Stock Analysis Report
ROYAL CARIBBEAN (RCL): Free Stock Analysis
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Following the recovery in the leisure sector, the Miami-based Royal
Caribbean resumed its quarterly dividend a year ago. However, the
quarterly dividend of 10 cents was lower than its prior pay-out of
15 cents a share.
Earlier in October 2008, Royal Caribbean - the second largest
cruise company, suspended the payment of its annual dividend in the
wake of the economic recession and high cost of raising new
The latest hike brings the forward annual dividend yield to 1.62%
as of September 12, 2012. Although Royal Caribbean's forward
annualized dividend yield inched past the industry average of
1.54%, it lagged its closest peer
) current dividend yield of 2.71%.
At the end of the second quarter, Royal Caribbean's cash balance
stood at $212.2 million compared with $262.2 million at the end of
fourth quarter 2011. We believe that the company has enough cash
and cash equivalents to provide optimum shareholder value.
With lesser ship additions in the next few years, free cash flow is
expected to rise. Royal Caribbean international will decrease in
capacity by 4% in 2013. Its growth momentum will not pick up before
the delivery of the first Sunshine ship in late 2014. The overall
year-over-year growth for the company in 2013 will be up by just
over 1% which will likely lessen capital expenditure leading to
higher free cash flow generation.
We believe that an increase in dividend payment amidst a sluggish
industry background affirms Royal Caribbean's strong liquidity
position and improved operating performance. We maintain a
long-term Neutral recommendation on the stock.