St. Jude Beefs up Dividend - Analyst Blog

By Zacks Equity Research,

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Medical technology major St. Jude ( STJ ) has bumped up its quarterly dividend to 23 cents a share from 21 cents, representing a 10% hike. This lifts the annual dividend to 92 cents per share from the current payout of 84 cents and equates to a dividend yield of roughly 2.2%. The revised quarterly dividend is payable on April 30, 2012, to shareholders of record as on March 30, 2012.

St. Jude's Board, in February 2011, approved the commencement of a regular quarterly cash dividend. The company paid the initial quarterly dividend (of 21 cents a share) on April 29, 2011.

Moreover, the Minnesota-based company's Board, in December 2011, authorized a new share buyback program, allowing it to repurchase up to $300 million of its common stock. St. Jude completed, during third-quarter 2011, the $500 million repurchase program announced in August 2011.

St. Jude remains confident that it has reached a level where it can return value to investors in the form of dividends while continuing to invest in growth programs along with share repurchases and acquisitions.

St. Jude's revenues and earnings for fourth-quarter fiscal 2011 beat the Zacks Consensus Estimates. Revenues rose 4% in the quarter, fueled by double-digit growth across the company's Cardiovascular, Atrial Fibrillation and Neuromodulation  franchises.

St. Jude is consistently producing revenue growth and positive earnings surprises over the past several quarters. We are impressed by its solid fundamentals, healthy growth trajectory, strong product mix, robust pipeline and cost management initiatives.

While a host of new growth drivers (including new products and emerging markets) are expected to boost results in 2012 and beyond, we remain cautious about increased competition, a still soft CRM market and the dilutive impact of acquisitions. 

A still choppy CRM space overhangs on St. Jude and its peers Medtronic ( MDT ) and Boston Scientific ( BSX ). Our long-term Neutral recommendation on St. Jude is in agreement with a short-term Zacks #3 Rank (Hold).

BOSTON SCIENTIF ( BSX ): Free Stock Analysis Report
MEDTRONIC ( MDT ): Free Stock Analysis Report
ST JUDE MEDICAL ( STJ ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BSX , MDT , STJ

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