In a bid to boost investors' confidence and reward them, Spectrum Brands Holdings Inc.SPB has been making regular dividend payments and share buybacks. Recently, the company announced a new $500 million share buyback program and raised its quarterly dividend.
The company's new $500 million share repurchase program extends over a three-year period and replaces its existing three-year $300 million program with expiry date of Jul 2018. The new share buyback program is effective immediately.
Further, the global consumer products company hiked its quarterly dividend by 10.5% to 42 cents per share compared with the previous dividend rate of 38 cents. This marks the company's fourth annual dividend hike since the start of its dividend program in Mar 2013.
The raised dividend will be distributed on Mar 7, 2017 to shareholders with record as on Feb 14, 2017.
The improved buyback authorization and a hiked dividend clearly demonstrate Spectrum Brands confidence in its future earnings and free cash flow generation capacity. The company believes perking up share repurchase authorization is ideal to return value to shareholders and at the same time make effective use of free cash flows.
Well, this is also the general belief in the investment world. Dividend increases not only enhance shareholder returns but also raise the market value of the stock. Hence, companies bank on this strategy to bolster investors' confidence in the stock, thereby persuading them to either buy or hold the scrip instead of selling it.
Share repurchase programs and dividend payments are frequent among companies with a stable cash position and healthy cash flow. Some companies that are known for their shareholder-friendly moves are NIKE Inc. NKE , Tractor Supply Company TSCO and Avis Budget Group Inc. CAR . These companies have time and again testified their commitment to enhancing shareholder value through regular dividend hikes and boosting share repurchases.
Spectrum Brands Holdings, Inc. Price
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