The board of directors of Visa Inc. V recently approved an 18% hike in its quarterly dividend. The company will now reward shareholders with a dividend of 16.5 cents per share as against 14 cents paid as of Sep 6, 2016. This translates to a dividend 66 cents per share on an annualized basis.
The increased dividend will be paid on Dec 6, to the shareholders on record as of Nov 28, 2016. Based on the closing price of $81.58 as of Oct 18, the increased dividend translates to a yield of 0.68%. This current dividend yield is less than the industry yield of 1.59%
The transaction service provider possesses a strong cash balance that supports its effective capital deployment. The company remains focused on boosting shareholder value through dividend increases as well as share buybacks.
The company increases its dividend payout each year. In fact, the latest hike marks the 8th annual dividend increase by the company. The dividends have been increased at an eight-year CAGR of 23% since 2008. The latest dividend increase reflects a five-year growth of 30.9%. The last dividend hike was announced on Oct 21, 2015, when the company raised the payout by 16.7% to 14 cents.
Other than dividend increase, the company also undertakes several capital deployment strategies to retain shareholders’ confidence. Visa intends to offset the dilutive impact of the preferred shares issued by buying stock in excess of its normal buyback program. It expects to achieve its target by the end of first-quarter fiscal 2018.
VISA INC-A Price
Zacks Rank & Stocks to Consider
Currently, Visa carries a Zacks Rank #2 (Buy).
Investors can also consider other well-ranked stocks from the same space likeEquifax Inc. EFX, MasterCard Incorporated MA and Wex Inc WEX. All of these stocks carry the same Zacks Rank as Visa. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MasterCard posted positive earnings surprise throughout last four quarters with an average beat of 6.9%
Equifax also delivered positive earning surprise in last four consecutive quarters with an average beat of 4.4%.
Wex surpassed estimates in three of the last four quarters with an average beat of 3.8%.
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