Disney Raises Its Dividend By 50%

With all the good news about yesterday’s rally, I wanted to highlight another optimistic news item: Disney raised its dividend by 50% to 60 cents per share. I’m not sure why, but Disney only pays an annual dividend.

This is actually a very small dividend compared with the company’s total profit. Disney is expected to earn $2.90 per share for the fiscal year ending next September. Sixty cents works out to a payout ratio of just over 20%. The stock’s dividend yield is only 1.67% which is still well below the overall market’s yield.

Disney’s last two earnings reports have been pretty good. The stock looks to be a pretty solid value.

“The Walt Disney Company had a great creative, strategic and financial year,” Robert A. Iger, president and chief executive officer, said in the statement. “We are pleased to be able to raise our shareholder dividend by 50 percent while continuing to invest for future growth.”

On November 10th the company reported a 21 percent increase in fiscal 2011 profit to $4.81 billion, or $2.52 per share, on revenue that gained 7.4 percent to $40.9 billion.

Disney was expected to raise its dividend by 5 cents to 45 cents, according to data compiled by Bloomberg. An increase to 65 cents is forecast for next year, according to the data.

Posted by on December 1st, 2011 at 11:27 am


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