Dazzling investors with more than +20% sales growth figures during its recent conference call, Kroger (NYSE:KR) announced today its Board of Directors greenlit a double-digit increase to its next dividend payment. Arriving on Sept. 1, the quarterly dividend will by hiked 13%, with shareholders of record as of Aug. 14 receiving $0.18 per share.

Annual dividends have now grown from $0.64 to $0.72 per share. In its press release, the company is keen to highlight the boost is the 14th consecutive dividend rise since Kroger reinstated quarterly dividends in 2006. All of the dividend increases since then have had a CAGR (compound annual growth rate) of double-digit percentages.

Growth concept.

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CEO Rodney McMullen said the "13 percent dividend increase reflects our ability to deliver strong free cash flow during uncertain times and throughout the economic cycle." Kroger ascribes its success in offering an attractive dividend to its growth-driving capital allocation strategy. It does, however, warn the COVID-19 coronavirus represents a wild card which could affect its dividend unpredictably in the future.

Kroger's stock is currently up more than 1% in midday trading. The company saw revenue increase by $4.2 billion during the recent quarter, driven by a +19% jump in comps (comparable store sales). It also came close to doubling its operating cash flow. While Kroger shares were trading even higher in 2015, reaching $42 in late December, its current price north of $33 per share represents a strong recovery from its March 2020 drop to less than $28.