Tupperware Brands Jacks Up Dividends, Lifts Buyback
Companies can return cash to shareholders through dividends and stock buybacks. Housewares and beauty products marketer Tupperware Brands ( TUP ) is doing both.
In conjunction with better-than-expected quarterly results Tuesday, the company jacked up its dividend and sharply increased its stock buyback.
Tupperware Brands, which is known for its plastic food containers, lifted its quarterly payout by 72% to 62 cents a share from 36 cents. The dividend will be paid April 5 to shareholders of record on March 20. With the latest hike, the firm's dividend has nearly tripled since 2009.
Currently, the stock has an annualized yield of about 2%. But the latest dividend hike will lift its yield to about 3.4% at current prices. Tupperware Brands has paid shareholder dividends since being listed on the NYSE in 1996.
The company also raised its target payout ratio from about 33% to 50%. Generally, dividends are paid with a company's earnings.
Tupperware added $800 million to its share buyback program, raising the total amount to $2 billion. The buyback will now run until Feb. 1, 2017.
Helped by strength in emerging markets, the company's Q4 earnings rose 14% to $1.71 a share. That marked the second straight quarter of double-digit percentage growth and beat expectations by 3 cents.
Sales increased 5% to $711 million, ending a three-quarter streak of declines or no growth. Emerging markets made up 60% of sales.
The company's full-year 2012 earnings climbed 12% to $4.99 a share -- the seventh straight year of double-digit growth.
For 2013, Tupperware pegged profit at $5.62 to $5.77 a share, or up 13% to 16% from 2012. Consensus estimates are currently for $5.55 a share. The company sees revenue climbing between 5% and 7% for the year.
Tupperware is at a new high, but extended from a rebound off the 10-week moving average. The stock broke out from a cup-with-handle base in November.
On Tuesday, the stock finished higher for the 11th straight session, tying a record from a year ago.