C.H. Robinson Worldwide Inc.CHRW – one of the largest non-asset based third party logistics companies across the globe – recently announced a dividend hike. The move reflects the company’s intention of utilizing free cash to enhance shareholders’ returns, in turn, boosting their confidence in the stock.
The Eden Prairie, MN-based company raised its quarterly dividend by 13.15% to 43 cents (or $1.72 annually) from 38 cents a share (or $1.52 annually) paid earlier. The new dividend, which has been approved by the company’s board of directors, will be paid on Dec 31, 2015 to stockholders on record as of Dec 14. The dividend yield based on the new payout and the last closing market price is approximately 2.76%.
We believe the dividend hike not only highlights C.H. Robinson’s commitment to create value for shareholders, but also underscores the company’s healthy financial condition and confidence in its business, going forward. Moreover, a look at past records reveals C.H. Robinson’s stable dividend payment history. The company has paid dividends for more than 25 years now.
We are impressed by the company’s efforts to reward shareholders through dividends and share buy backs. In the third quarter of 2015, the company paid $57 million in dividends and bought back shares worth $73 million.
Investors prefer an income generating stock. Naturally, a dividend paying stock is always a preferred option. Investors looking for regular income from stocks are almost always likely to be inclined toward companies that have a track of consistent and incremental dividend payments. C.H. Robinson ensures that it does not disappoint its investors in this regard.
Zacks Rank
C.H. Robinson presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the transportation space include SkyWest Inc SKYW, Matson, Inc. MATX and Expeditors International of Washington Inc. EXPD. SkyWest and Matson sport a Zacks Rank #1 (Strong Buy), while Expeditors carries a Zacks Rank #2 (Buy).
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