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Wolverine (WWW) Up on Dividend Hike and Share Buyback Plan

Zacks Equity Research

Wolverine World Wide, Inc. WWW is focused on boosting investor sentiment through several growth initiatives and shareholder-friendly moves. Evidently, the company announced a 25% hike in its quarterly dividend to 10 cents per share from 8 cents. The raised dividend is payable May 1, 2019, to its shareholders held in record as of Apr 1, 2019.

Additionally, the company’s board of directors authorizes it to repurchase up to $400 million worth of shares in the next four years. Wolverine also provided information on amendment to its Credit Agreement and enhanced capital structure.

Following these investor-friendly efforts, shares of the company increased 4.4% during the trading session on Feb 12. In a year’s time, this Rockford, MI-based company has gained roughly 26.3%, outperforming its industry’s 20% growth.

Notably, this latest share repurchase program is in addition to $27 million worth of shares remaining under the previous repurchase program. In 2018, Wolverine returned around $204 million to its shareholders through dividend payouts and share repurchases. The company also bought back shares worth $105 million during the fourth quarter of 2018.

Further, the company improved its capital structure by revising its Credit Agreement to provide new term loan A facility in total principal amount of $200 million and also increased revolving credit facility with total commitments of $800 million from $600 million earlier. Per management, revision to the capital structure would add roughly $1.5 billion to the Wolverine's liquidity.

This apart, Wolverine has been progressing well with its GLOBAL GROWTH AGENDA that focuses on empowering brands, implementing advanced digital tools and expanding into new markets. The company is also riding well on its strong international presence.

Moreover, this Zacks Rank #3 (Hold) company boasts a wide portfolio of owned and licensed brands of casual as well as athletic footwear and apparel. Notably, two of the company’s biggest brands, namely Merrell and Wolverine, have been gaining traction lately. Backed by innovation and expansion of its brands to newer geographies and platforms, the company plans to strengthen its brand portfolio.

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