Medical technology major,
St. Jude Medical Inc.
) has hiked its quarterly dividend by 9% to 25 cents a share from
23 cents. This lifts the annual dividend to $1.00 per share from
the current payout of 92 cents and equates to a dividend yield of
roughly 2.4%. The revised quarterly dividend is payable on Apr
30, 2013, to shareholders of record as on Mar 29, 2013.
This represents the company's 2nd annual dividend increase
since its inception in Feb 2011. The company's previous dividend
increase was in Feb 2012, when it raised the quarterly payout by
10% to 23 cents a share from 21 cents.
) also pay regular dividends to its shareholders. Both Medtronic
and Stryker increased their quarterly dividends by 7% and 25%,
respectively, in 2012.
St. Jude projects revenue growth for 2013 to be dismal due to
an extremely challenging healthcare environment and a soft CRM
market. Hence, it has turned its focus on cost savings,
restructuring, dividends and share repurchase programs to boost
its bottom line.
The Minn.-based company's board, in Nov 2012, authorized a new
share buyback program, allowing it to repurchase up to $1 billion
of its common stock. The company bought back 27.7 million shares
of its common stock for $1.1 billion in 2012.
The dividend increase along with the share buyback program
underscores St. Jude's commitment to deliver incremental returns
to investors leveraging a solid balance sheet, healthy free cash
flow and earnings power. The company's solid balance sheet allows
it to support the dividend hike. St. Jude exited the fourth
quarter of 2012 with cash and cash equivalents of $1,194 million,
a year-over-year increase of roughly 21.1%.
St. Jude is consistently producing positive earnings surprises
over the past several quarters. The company has managed to
surpass the Zacks Consensus Estimate in the last four quarters
with an average earnings surprise of 2.36%.The current Zacks
Consensus Estimates for the first quarter and the full year 2013
are 91 cents and $3.70, respectively.
St. Jude currently carries a Zacks Rank #3 (Hold). While we
remain on the sidelines regarding St. Jude, medical products
companies such as
) with a Zacks Rank #1 (Strong Buy), is expected to do well.
MEDTRONIC (MDT): Free Stock Analysis Report
NUVASIVE INC (NUVA): Free Stock Analysis
ST JUDE MEDICAL (STJ): Free Stock Analysis
STRYKER CORP (SYK): Free Stock Analysis
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