Kroger Increases Dividend Payout, Announces Share Buyback
Zacks Investment Research | Jun 23, 2016 09:41PM ET
In an effort to enhance shareholders’ return, The Kroger Co. (NYSE:KR) , one of the largest grocery retailers, recently increased its quarterly dividend by about 14% to 12 cents a share (or 48 cents annually) from the prior payout of 10.5 cents (or 42 cents annually). The increased dividend will be paid on Sep 1 to stockholders on record as of Aug 15, 2016. Following, the news the company’s shares inched up 1.3% on Jun 23, 2016.
The dividend yield, based on the new payout and the last closing market price, is approximately 1.4%.
Kroger is actively managing its capital, returning much of its free cash to investors via share buybacks and dividends. This apart, the company has been deploying cash flows in opening stores and foraying into new markets. Kroger last hiked its quarterly dividend by 13.5% in Jun 2015.
The company also replaced its prior authorization with a new $500 million buyback program. Since, Jan 2000, the company has repurchased shares worth $12.9 billion.
Kroger is an attractive option for both growth and income seeking investors. An income generating and dividend paying stock is always a preferred investment option. People looking for regular income from stocks are most likely to be inclined toward companies that have a track record of consistent and incremental dividend payments.
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