We're only a few days away from the start of a new earnings season, and true to recent form, several companies have gotten a head start on dividend raises. In line with recent trends, a clutch of noted stock market names declared higher payouts.
When the season rolls around, we'll probably see a higher volume of raises for a few weeks. In the meantime, we can look forward to collecting higher distributions from Sirius XM Radio (NASDAQ:SIRI), Bank of the Ozarks (NASDAQ:OZRK), and RPM International (NYSE:RPM).
Sirius XM Radio
Satellite-radio purveyor Sirius XM Radio is cranking up the volume on its payout. The company has declared a 10% raise in its quarterly dividend; it will now pay just over $0.01 per share.
Satellite radio has snowballed in profitability, in no small part because its product has become a frequent option in new cars. The company has been consistently profitable for years, and it's improving its fundamentals -- Q2 revenue rose by an encouraging 9% to $1.3 billion, while net profit advanced 16% to just over $200 million. Both results exceeded the average analyst estimates.
Increased car take-up and strong programming such as live NFL football and concert exclusives from noted bands, should help drive SiriusXM's subscriber numbers higher -- after crossing 30 million for the first time last year. In turn, this should lift operating and free cash flow, both of which have risen notably over the past half-decade.
Although the company spends more than it needs to on share buybacks and just agreed to make a $480 million investment in Pandora, its total dividends paid figure is rather light by comparison. So I'd expect this distribution to at least be sustained for the time being.
This dividend will be paid on Nov. 30 to stockholders of record as of Nov. 9. Its payout ratio is a very modest 26% on Q2 net profit. The raised amount would yield 0.8% on the company's most recent closing share price. By comparison, the current average of dividend-paying stocks on the S&P 500 is 1.9%.
RPM International is a frequent visitor to this article series, for a very good reason. The coatings and sealants maker is a Dividend Aristocrat, one of the market's few companies that has raised its payout at least once annually for a minimum of 25 years in a row. RPM International's latest is a nearly 7% bump to $0.32 per share.
Expectations for the company's recently reported Q1 2018 were muted, as it had disappointed in previous frames. Fueled by acquisitions, revenue in the quarter grew by just under 8% on a year-over-year basis to $1.35 billion. Net income, meanwhile, climbed slightly higher by 3% to a bit over $116 million.
Efforts to repair the recent hurricane damage suffered in Florida, Texas, and the Caribbean should help support RPM International's fundamentals. The company is forecasting low to mid-single-digit percentage improvements in its key industrial and consumer segments for this fiscal year. It also anticipates per-share earnings of $2.85 to $2.95, which would be well above last year's tally of $1.36.
RPM International is a careful, conservative operator that never strays far from its core product assortment. It also manages its cash carefully, keeping its spending on dividends and share buybacks well under the level of its free cash flow. I don't see that changing anytime soon, so I'd rate this dividend as extremely safe.
RPM International's next payout will be dispensed on Oct. 31 to shareholders of record as of Oct. 16. It yields a theoretical 2.5%, and its payout ratio is a fairly low 37%.
Bank of the Ozarks
In a way, Bank of the Ozarks is topping Dividend Aristocrats like RPM International. The Arkansas-based regional lender has been increasing its quarterly payout not every year, but every quarter of late. Its 29th raise in a row is a 3% bump to just under $0.19 per share.
It should keep improving that number. The company's asset base has expanded to the point where it is the largest bank in Arkansas. This is due to prudent acquisitions, and the assertive performance of its real estate operations, not to mention the good credit discipline that has kept its core fundamentals sound.
The bank's Q2 results reflected a new corporate structure, in which its former holding company was subsumed into its commercial operations. That, combined with organic growth from the aforementioned factors, pushed net income 69% higher to almost $91 million. Total revenue rose by 65% to just under $234 million, aided by a 63% jump in total assets, and a 59% rise in deposits.
On a per-share basis, that net profit amounted to $0.73 per share, putting the payout ratio of the company's new dividend at only 25%. This is more than sustainable; as such, I'd expect that impressive quarterly raise streak to continue.
Bank of the Ozarks' latest enhanced dividend is to be handed out on Oct. 20 to shareholders of record as of Oct. 13. It would yield 1.5% on the current stock price.