McCormick & Co. Inc. yesterday approved a 6 percent increase in its quarterly cash dividend, from 16 cents to 17 cents per share.
This is at least the seventh consecutive December that McCormick has approved a penny boost in its dividend, the company said. The dividend is payable Jan. 22 to shareholders of record Dec. 31. McCormick has paid an annual dividend since 1925 -- including throughout the Great Depression.
"They have been very attentive to increasing shareholder benefits by increasing the dividend on an annual basis," said Judith M. DeHoff, an analyst who follows the Sparks-based spice and seasonings company for Legg Mason Wood Walker Inc. "They are very much shareholder-oriented -- this is just another example."
Companies typically boost dividends as a way to reassure shareholders that the business is healthy.
DeHoff rates McCormick shares a "buy" and has a target price of $38. McCormick shares closed yesterday at $34.25, up 43.75 cents each.
In the last year, the stock has ranged from $27.0625 to $36.4375 per share.
Robert J. Lawless, McCormick's president and chief executive officer, said the dividend increase was based on the company's "confidence in the future."
The company is also in the midst of a 10 million-share stock buyback, which it expects to complete by the middle of next year. Stock buybacks reduce the shares outstanding, meaning that profits are apportioned across fewer shares. That, in turn, raises a company's earnings per share -- the main metric by which Wall Street evaluates a firm's health.
Pub Date: 12/22/98