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Johnson Controls (JCI) Hikes Dividend by 11.5%; Shares Gain

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Shares of Johnson Controls Inc.JCI gained 3.6% to close at $45.51 on Nov 18, 2015 after the company announced an increase in its quarterly dividend. In a bid to boost shareholder value, Johnson Controls raised its quarterly cash dividend by 11.5% to 29 cents per share from the prior payout of 26 cents.

The new dividend will be paid on Jan 5, 2016 to shareholders on record as of Dec 11, 2015. The increased dividend implies an annual yield of 2.5%, based on the closing share price of $45.51 as of Nov 18.

Johnson Controls' dividend hike reflects management's confidence in the overall business. In fact, higher dividend is not a new phenomenon at Johnson Controls. The company regularly increases its dividend to boost shareholder value. The company has raised its dividend consistently in 35 of the last 37 years. Years 2008 and 2009 had alone been exceptions on account of the global recession.

Moreover, the company has regularly paid dividends since 1887. The last time Johnson Controls had increased its dividend was in Nov 2014. Dividend was hiked by 18% to 26 cents per share from 22 cents paid earlier.

Johnson Controls has a strong cash balance which allows the company to focus on capital deployment. In fiscal 2015, the company spent $1.4 billion toward share repurchases. With this, the company has utilized about $2.6 billion of its present $3.6 billion share repurchase authorization. Regular buybacks help enhance shareholder value at a company.

Johnson Controls is a supplier of automotive interiors, batteries and other control equipment. It currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Better-ranked automobile stocks include General Motors Company GM , Fox Factory Holding Corp FOXF and American Axle & Manufacturing Holdings Inc. AXL . All these stocks carry a Zacks Rank #2 (Buy).

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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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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