Are you tired of dividend raises yet?
If the answer is "yes," 2017 just isn't your year. We've been inundated with increases from companies both new to them and from veteran lifters. Our three chosen raisers from last week are more in the latter category, with one even gracing the hallowed dividend aristocrats list.
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Clorox
A familiar name on the grocery aisle or in the cabinet under the sink, Clorox (CLX -0.57%) has bumped its quarterly payout 5% higher to $0.84 per share.
That wasn't much of a surprise, since the company is the aforementioned dividend aristocrat -- one of the market's few companies that has lifted its payout at least once annually for a minimum of 25 years running. Clorox has upped its dividend each and every year since 1977.
2017 has been quite good to the company. In February, the company posted Q2 results that showed pleasing year-over-year growth in net sales (by 4% to almost $1.48 billion), while net profit comfortably exceeded analyst projections. The Q3 numbers weren't as impressive, but Clorox is still estimating growth on both the top and bottom lines for the entirety of fiscal 2017; 3% to 4% for the former, and 7% to 9% for per-share earnings.
The company's operating and free cash flow figures have been on the decline lately, although not at a level steep enough to cause concern. In its two most recent fiscal years it spent slightly more than its FCF on dividends and share buybacks -- however, this was offset by proceeds from the sale of stock.
CLX Free Cash Flow (TTM) data by YCharts
Clorox is an effective manager of its cash; that, plus the anticipated higher profitability, should allow it to remain an aristocrat. Expect those dividend raises to continue.
Clorox's upcoming payout will be dispensed on Aug. 4 to stockholders of record as of July 19. At the most recent closing share price, it would yield 2.6%. That's higher than the current 1.9% of dividend-paying stocks on the S&P 500.
Tractor Supply Company
Specialty retailer Tractor Supply Company (TSCO 2.68%) is about to hand back a bit more cash from its register. The company announced a nearly 13% lift in its quarterly dividend to $0.27 per share.
The news came several weeks after Tractor Supply released its Q1 2017 results, which revealed an encouraging 7% year-over-year rise in net revenue (to $1.56 billion). This was due to higher store count, however; more revealingly, comparable-store sales dipped by 2%. Meanwhile, net income declined by 7% to land at just under $68 million.
The company ascribed the drops to "challenging" weather conditions, which were worse than the previous year (this was not unexpected -- 2016 saw an early spring). The relatively uglier conditions kept customers in its northern regions away from the stores.
Still, Tractor Supply is (for the moment, anyway) estimating growth in "comps" for the full year of 2% to 3%, and a consequent 2% to 5% lift in net income. That should help goose cash flow, but if I were a shareholder I'd be concerned about the company's spendthrift ways -- it tends to shell out more than its annual free cash flow on dividends and buybacks, after all.
TSCO Total Dividends Paid (Annual) data by YCharts
Tractor Supply's freshly raised dividend is to be paid on June 6 to shareholders of record as of May 22. It would yield 1.8% at the current stock price.
Brink's
Brink's (BCO 2.10%)takes the prize for highest-percentage dividend raise out of our three stocks for this installment. The veteran cash security services operator is hoisting its quarterly payout 50% higher, to $0.15 per share.
The company also said its board has authorized a new $200 million stock buyback program.
As is its habit in recent quarters, Brink's topped analyst estimates for profitability in its recently reported Q1. Adjusted net income nearly doubled on a year-over-year basis, hitting $29 million. At $0.57 per share, that well exceeded the average analyst estimate.
Revenue also went north, rising by 7% to $740 billion. The company said it managed to improve its top line in all three of its geographic segments; this, mixed with cost savings, made for a potent combination.
Brink's anticipates more improvements in both line items going forward; its ambitious three-year strategic plan counts on 20% annual operating profit growth (to $325 million) between now and then.
This is a company guided by sharp, determined management. That extends to how it handles its cash flow, which is conservative and prudent (if not necessarily generous with dividend payouts). Free cash flow has been more than sufficient to cover the company's dividend, and should remain so even with that 50% raise and the new share repurchase initiative.
BCO Total Return Price data by YCharts
Brink's will hand out its next dividend on June 1 to investors of record as of May 18. The new distribution would yield just under 1%.
The company's stock repurchase program terminates on Dec. 31, 2019.
