Coca-Cola Enterprises Inc. (CCE) recently increased its quarterly dividend by 25% to 20 cents per share, which is equivalent to an annual dividend of 80 cents. The dividend is payable on Mar 21, 2013, to shareholders of records as of Mar 8, 2013. The company’s new dividend increased from 16 cents, and was last paid in Dec.
The current increase in dividend is higher than the previously guided 15% year-over-year increase announced at the company’s Analyst Day held on Dec 18, 2012. This reflects that the company has a strong liquidity position. Coca-Cola Enterprises had cash and cash equivalents of $803 million as of Sep 28, 2012, higher than $422 million as of Jun 29, 2012.
Coca-Cola Enterprises is a strategic bottling partner of The Coca-Cola Company (KO) and has been consistently increasing its dividend rate for the past six years. Earlier Coca-Cola Enterprises had increased its dividend by 23% on Feb 7, 2012.
Other than issuing dividends, the company returns value to its shareholders through buybacks. The company authorized its third share repurchase program worth $1.5 billion that commenced in Jan 2013. The company expects to repurchase shares worth at least $500 million during 2013.
Overall, we are optimistic about the company’s strong brand portfolio and solid cash position. Its cost saving initiatives and accelerated share buybacks are aimed at offsetting headwinds from a soft operating environment.
Coca-Cola Enterprises Inc. currently holds Zacks Rank #3 (Hold).
Other related companies worth considering include Coca-Cola Hellenic Bottling Company S.A. (CCH) and Coca-Cola FEMSA S.A.B. de C.V. (KOF) both carrying a Zacks Rank #2 (Buy).
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