Royal Caribbean Cruises Ltd.
) recently more than doubled its quarterly dividend to 25 cents
per share from 12 cents. This equates to an annual payout of
$1.00 per share. The new dividend will yield 2.58% annually.
The increased quarterly dividend will be paid on Oct 8, 2013 to
stockholders of record as of Sep 24. The current hike comes
exactly after a year of its prior dividend hike announced in Sep
2012 (from 10 cents to 12 cents, which was paid on Oct 9,
Following the recovery in the leisure and recreational
services sector, Miami-based Royal Caribbean resumed its
quarterly dividend in 2011. Earlier in Oct 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 capital.
With the recent hike, Royal Caribbean's dividend now matches
that of another cruise company
). Carnival's current dividend yield stands at 2.67% as Sep
Royal Caribbean's financial position is stable. It generates
sufficient free cash flow to return capital to shareholders. At
the end of the second quarter of 2013, cash and cash equivalents
decreased to $205.2 million.
With lesser ship additions in the next few years leading to
lower capital expenditure, free cash flow is expected to rise
further. However, its growth momentum will not pick up before the
delivery of the first Sunshine ship in late 2014.
Royal Caribbean is leaving no stone unturned to enhance the
company's long-term value. Alongwith the dividend hike
announcement, Royal Caribbean also proposed to do away with the
staggered terms for directors and replace it with annual
Furthermore, it elected William L. Kimsey as its first lead
director who will be a link between the board's non-management
members and Chairman and Chief Executive Officer. The lead
director will also be involved in meetings with major
Royal Caribbean currently carries a Zacks Rank #3 (Hold).
Other players in the leisure and recreational industry, which
look attractive at current levels, include
Rick's Cabaret International Inc.
Cedar Fair L. P.
). While Rick's Cabaret carries a Zacks Rank #1 (Strong Buy),
Cedar Fair retains a Zacks Rank #2 (Buy).
CARNIVAL CORP (CCL): Free Stock Analysis
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ROYAL CARIBBEAN (RCL): Free Stock Analysis
RICKS CABARET (RICK): Get Free Report
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