U.S. markets closed
  • S&P Futures

    +8.75 (+0.20%)
  • Dow Futures

    +86.00 (+0.25%)
  • Nasdaq Futures

    +29.25 (+0.19%)
  • Russell 2000 Futures

    +6.30 (+0.28%)
  • Crude Oil

    -0.09 (-0.12%)
  • Gold

    -17.40 (-0.98%)
  • Silver

    -0.35 (-1.54%)

    -0.0005 (-0.05%)
  • 10-Yr Bond

    +0.0120 (+0.91%)
  • Vix

    -3.49 (-14.33%)

    -0.0003 (-0.02%)

    +0.0720 (+0.07%)

    +1,246.08 (+2.97%)
  • CMC Crypto 200

    +44.79 (+4.31%)
  • FTSE 100

    +102.39 (+1.47%)
  • Nikkei 225

    -200.31 (-0.67%)

Kroger (KR) Ups Dividend: Here're Few More Things to Know

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Most companies resorted to various cost-containment measures to counter the liquidity crisis, when the pandemic gripped the economy. These included pay cuts or furloughs, curtailing capital expenditures, and even halting share repurchases or pulling back dividends. More than a year later, things are looking up courtesy of stimulus package and swift vaccination drive. Market pundits are of the opinion that resumption of normal business activities could pave the way for dividend hikes and share buybacks this year. Well, for now investors have some more good news from The Kroger Co. KR, following an impressive first-quarter fiscal 2021 performance by this operator of supermarket chain.

This Cincinnati, OH-based company has announced an increase in its quarterly dividend. Impressively, the hike marked Kroger’s 15th successive year of dividend increase. The company’s board of directors raised the quarterly dividend by 17% to 21 cents a share, which is payable on Sep 1, 2021 to shareholders of record at the close of business on Aug 13, 2021. Last year in June, the company increased its regular quarterly dividend by 13% to 18 cents.

The latest dividend increase brings its annualized dividend to 84 cents a share compared with the prior rate of 72 cents. The hike reflects the company’s dividend yield of 2.1%, based on its closing share price of $39.15 on Jun 24. The quarterly dividend has increased at a double-digit compounded annual growth rate since it was reinstated in 2006.

Read on for More

Kroger is among those handful of companies that continued to reward shareholders even amid the crisis. Backed by sound fundamentals, the company has time and again highlighted its commitment to enhancing shareholder value. The current hike reflects strong cash flow generation capability driven by better execution of operating plans. Management expects to generate free cash flow between $1.8 billion and $2 billion in fiscal 2021.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Impressively, the company has been undertaking efforts to strengthen position not only with respect to products but also in terms of the way consumers prefer shopping. It has been making significant investments to enhance product freshness and quality, and expand digital capabilities. Notably, Kroger has been introducing new items under its “Our Brands” portfolio — launched 253 new items during the first quarter of fiscal 2021.

The company’s “Restock Kroger” program involving investments in omni-channel platform, identifying margin-rich alternative profit streams, merchandise optimization, and lowering of expenses have been gaining traction. Realizing the need of the hour, Kroger has been offering a no-contact delivery option, low-contact pickup service and ship-to-home orders. It expanded to 2,233 Pickup locations and 2,488 Delivery locations. It has expanded the partnership with 80 Acres Farms to 316 stores.

Management anticipates fiscal 2021 earnings between $2.95 and $3.10 per share and FIFO operating profit in the band $3.5-$3.7 billion. We note that shares of this Zacks Rank #3 (Hold) company have advanced 26% in the past six months against the industry’s decline of 4.1%.

3 Stocks Hogging the Limelight

Target TGT has a trailing four-quarter earnings surprise of 62.1%, on average. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco COST has a trailing four-quarter earnings surprise of 7.7%, on average. The stock carries a Zacks Rank #2 (Buy).

Dollar General DG, a Zacks Rank #2 stock, has a trailing four-quarter earnings surprise of 18.1%, on average.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Target Corporation (TGT) : Free Stock Analysis Report

Dollar General Corporation (DG) : Free Stock Analysis Report

The Kroger Co. (KR) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research