Carnival Ups Dividend By 14%, Extends Share Buyback Program
Zacks Investment Research | Apr 09, 2017 09:22PM ET
Carnival (LON:CCL) Corporation’s (NYSE:CCL) board of directors approved a 14% hike in the company’s quarterly dividend. The revised quarterly dividend now comes in at 40 cents per share compared with the previous figure of 35 cents. The dividend will be paid on Jun 16, 2017, to shareholders on record as of May 26.
The new payout amounts to an annual dividend of $1.60 per share and represents a yield of 2.7%.
Strong balance sheet and cash flows provide Carnival the financial flexibility to offer dividend hikes. In the recently concluded fiscal first quarter, Carnival paid $254 million in cash dividends to stockholders. In the quarter, the company generated cash from operations of $932 million, representing an increase of nearly 17% over prior-year quarter. Cash and cash equivalents as of Feb 28, 2017, were $437 million.
Concurrently, the board authorized the company to repurchase up to $1 billion worth of shares. Repurchases may be made through both public market as well as private transactions and are subject to prevailing market conditions and other considerations. Since resuming the share repurchase program in late 2015, the company has repurchased more than 56 million shares valued at $2.7 billion.
Notably, the new share repurchase authorization and dividend hike further depicts the company’s efforts to enhance shareholders’ value.
Meanwhile, Carnival believes that it is well positioned for continued earnings growth, given the current strength in its bookings along with pricing trends for the year. Cost-containment efforts like lower fuel consumption should also aid profits. Going ahead, the company’s planned launch of new ships, its strategy to tap into the fast-growing Asian markets along with initiatives to drive revenue yields are expected to be beneficial.
Over the last six months, shares of Carnival have rallied 25.1% while the Zacks categorized Original post
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