Earlier this week,
) announced a 50% hike in its quarterly dividend to the holders
of its class A, B and C equity shares. Consequently, the company
will pay a quarterly dividend of 33 cents per share, up from 22
cents paid in the prior quarter.
This takes the annual cash dividend of Visa to $1.32 per
share, compared with 88 cents paid earlier. Considering the
closing share price of $136.49 on October 24, 2012, the increased
dividend translates into a dividend yield of 97%, substantially
higher than 64% paid earlier.
The increased dividend will be paid on December 4, 2012 to
shareholders of record as of November 16, 2012. Visa's strong
balance sheet and ample free cash balance allowed it to increase
the quarterly dividend amount. The company believes in sharing
its returns with shareholders to enhance shareholder value.
Consequently, it has been increasing its dividend annually over
the past four years.
In October 2011, Visa hiked its annual dividend by 47% to 88
cents per share from the prior dividend payout of 60 cents per
share. Before that, in October 2010, the company increased its
annual dividend by about 20% from the 2009 level, when it had
raised the dividend by 19% over 2008.
Visa is scheduled to release its fourth quarter and fiscal
2012 on October 31 after the closing bell.
The Zacks Consensus Estimate for Visa's fiscal fourth-quarter
2012 (ended September 30, 2012) earnings is currently pegged at
$1.50 per share, up about 18% year over year. Of the 26 firms
covering the stock, one revised the estimate upward while no
downward revisions were witnessed in the past 30 days.
For fiscal 2012 (ended September 30, 2012), Visa's earnings
are expected to be $6.16 per share, which surged about 23% over
Visa's fiscal third-quarter 2012 (ended June 30, 2012)
operating earnings of $1.56 per Class A common share outpaced the
Zacks Consensus Estimate of $1.45. Additionally, the earnings
substantially exceeded prior-year quarter's earnings of $1.26 per
share, primarily based on lower share count.
Visa, which competes with
), currently carries a Zacks #2 Rank, implying a Buy rating for
the short term. We maintain a long-term Neutral recommendation on
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VISA INC-A (V): Free Stock Analysis Report
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