It's not a one-time special dividend, but a boost to the regularly scheduled payments going forward. For 2007, Philips management expects to support this payout with solid growth, as the company has "a number of exciting new products" in the wings, and intends to simplify the company even further. In 2006, the semiconductor division was sold to a group of private investors.
Asset management efforts will help, too. Philips holds significant ownership stakes in JDS Uniphase
Philips' stated 2007 agenda also includes better relationships with both customers and employees. One goal is to make Philips "an exciting place to work"; another project will introduce Net Promoter Scores as a real business metric. Happy employees work harder, and happy customers will do your marketing for free.
That's the thinking, and other than the somewhat nebulous "exciting place to work" line, it sounds about right to me. You could pick a worse customer relationship model to emulate than Costco's
For further Foolishness:
- Philips on a Roll: Fool by Numbers
- 6 Foreign Stocks With Star Power
- Why Aren't You Buying Stocks on Sale?
Costco is a Motley Fool Stock Advisor selection, and you're just a click away from a free 30-day trial to our flagship newsletter service.
Fool contributor Anders Bylund is a TSM shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always sharp.