“Rock-solid fundamentals, rising earnings and a huge cash hoard which is now being repatriated are all strong arguments for this stock to be part of any conservative dividend growth portfolio,” D.A. writes. “Apart from a correction from mid 2015 to mid 2016 this stock has moved steadily from $61 five years ago until the current $168, a multiple of 2.75x. Adding in a dividend yield during that time of approximately 1.5% translates into an average annual total return of about 24%. Considering the sheer size of this company that is nothing short of impressive.”
“In August  the company started paying dividends again, at a split-adjusted quarterly rate of $0.38. The level was increased in May 2013 to a split-adjusted quarterly rate of $0.436. Ever since, a new and higher dividend has been paid each May,” D.A. writes. “The highest increase it has had in recent history is the May 2013 increase of 15% to a split-adjusted dividend of $0.436. I believe such a hike is quite possible for two reasons. First, there is an expectation in the investor community that some of the massive cash hoard will go towards an extra large increase. Two, such an increase will not be so large as to make the board uncomfortable as to the sustainability of the dividend. I therefore think the dividend will be hiked by 10-16% this spring for a new quarterly dividend of between $0.69-$0.73. I think it is more likely to be at the high end of that range rather than the low end.”
Much more in the full article here.
MacDailyNews Take: We’ll find out for sure on May 1st, but D.A.’s range sounds plausible.
Think buybacks and dividends, not major acquisitions. — MacDailyNews, January 8, 2018
Another $125 billion in buybacks would be seismic. – MacDailyNews, November 18, 2016