The Walt Disney Company DIS is an intriguing option for investors seeking both growth and income. The company announced a dividend hike, reflecting its plan of utilizing free cash to enhance shareholder returns.
The Burbank, CA-based company raised its semi-annual dividend to 71 cents per share from the prior payout of 66 cents. The increased dividend will be paid on Jan 11, 2016, to stockholders on record as of Dec 14, 2015. The company, which switched paying dividends on a semi-annual basis in July, informed that the total fiscal 2015 dividend payment jumped 19% on an annualized basis to $1.37 per share from fiscal 2014.
Dividend hikes not only enhance shareholder returns, but also raise the market value of the stock. Through this strategy, companies try to win investors and persuade them to either buy or hold the scrip instead of selling it.
Investors prefer an income generating stock, and a dividend paying one is always a preferable option. People looking for regular income from stocks are most likely to choose companies that have a consistent and incremental dividend payout track.
Other companies that increased their quarterly dividend in the recent past include Aaron's, Inc. AAN and Omega Healthcare Investors Inc. OHI. While Aaron's hiked its dividend by 8.7% to 2.5 cents per share, Omega Healthcare is committed to return1.8% to shareholders through its dividend of 56 cents per share. Another company, Lions Gate Entertainment Corp. LGF raised its dividend by 28.6% to 9 cents per share.
Disney currently carries a Zacks Rank #3 (Hold).
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