Markets

TE Connectivity (TEL) Announces a 14% Dividend Increase - Analyst Blog

In an effort to enhance its shareholders value, TE Connectivity Ltd. ( TEL ) declared a 14% increase in its quarterly dividend to 33 cents from 29 cents per share. The increased dividend, effective Apr 2015, will be paid after receiving the shareholders' nod at the company's Annual General Meeting on Mar 3, 2015. This would mark the fifth consecutive year of double-digit dividend increase. by the company.

The increased dividend rate brings TE Connectivity's annual dividend to $1.32 per share, as compared with the earlier figure $1.16. .Based on the closing share price of $61.92 on Dec 17, 2014, the new dividend implies a yield of 2.1%, which is better than the industry average of 1%.

TE Connectivity has always considered rewarding its shareholders with such dividend hikes. Prior to this, in Feb 2013, the company has announced a 16% hike in its quarterly dividend to 29 cents from 25 cents.

The new dividend is well supported by TE Connectivity's healthy financial position. The company's cash and cash equivalents at the end of fiscal 2014 stood strong at $2,457 million. Cash from operating activities amounted to $749 million, while free cash flow was $661 million.

With approximately 416 million weighted shares outstanding at the end of fourth-quarter 2014, the company needs to dish out approximately $549 million per year as dividend. Its strong financial position cushions the payout well.

TE Connectivity, with a comprehensive portfolio, remains the market leader in the connectivity business. The company remains focused on driving its growth both organically and through acquisitions. For the next five years, its business is anticipated to grow at an annual rate of 15%.

TE Connectivity carries a Zacks Rank #3 (Hold). Some better-ranked stocks that can be considered include Active Power Inc. ( ACPW ), AU Optronics Corp. ( AUO ) and AVX Corp. ( AVX ), all three sporting a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AVX CORP (AVX): Free Stock Analysis Report

ACTIVE POWER (ACPW): Free Stock Analysis Report

TE CONNECT-LTD (TEL): Free Stock Analysis Report

AU OPTRONCS-ADR (AUO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

TEL

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More