Tiffany & Company
), a high-end jewelry designer, manufacturer and retailer,
revealed its plan to utilize its free cash to boost stakeholders'
return by announcing a dividend hike.
The N.Y. based company, raised its quarterly dividend by 6% to
34 cents (or $1.36 annually) from 32 cents a share (or $1.28
annually). The increased dividend will be paid on Jul 10, 2013,
to shareholders of record as of Jun 20, 2013. This is 12th time
that Tiffany has hiked its dividend in the last 11 years.
The company's commitment toward increasing shareholders'
return reflects its free cash flow generating capability, sound
liquidity position and defined future prospects.
However, the news did not provide impetus to the stock, as the
share price of this Zacks Rank #3 (Hold) company dropped 0.1% or
9 cents to close at $76.49 on Thursday. The dividend yield based
on the new payout and the last closing market price is 1.8%.
Tiffany, an S&P 500 company, last hiked its quarterly
dividend to 32 cents from 29 cents in May 2012, reflecting an
increase of 10%.
Other companies, which recently increased quarterly dividend,
The Clorox Company
) by 11% to 71 cents,
American Water Works
) by 12% to 28 cents, and
) by 9% to 49 cents.
Dividend hikes not only enhance shareholder's return but raise
the market value of the stock. Through this strategy, the
companies bolster investor confidence on the stock, thereby
persuading them to either buy or hold the scrip instead of
selling them. Looking ahead, the company remains confident of its
growth potential, suggesting enhanced value for shareholders.
A dividend hike primarily reflects the company's sound
financial position and defined future prospects. This is quite
evident from Tiffany's balance sheet and cash flow positions. The
company ended fiscal 2012 with cash and cash equivalents of
$504.8 million and generated free cash flow of $300 million
during the fiscal year.
AMER WATER WORK (AWK): Free Stock Analysis
BAXTER INTL (BAX): Free Stock Analysis Report
CLOROX CO (CLX): Free Stock Analysis Report
TIFFANY & CO (TIF): Free Stock Analysis
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