Rockwell Automation Inc. (ROK) in a move to enhance value for shareholders hiked its quarterly dividend by 7.5 cents to 42.5 cents. This translates to a 21% increase from the prior dividend of 35 cents. The increased dividend will be paid on September 12, 2011, to stockholders of record on August 15, 2011.
The dividend hike comes after exactly a year. Rockwell Automation had last hiked its dividend in June last year by 6 cents to 35 cents, another 21% increase. The current 7.5 cent increase will cost the company about $42.7 million more annually. The payout boost reflects the company's solid financial position and confidence in its ability to generate cash in different business cycles.
Rockwell’s cash and cash equivalent improved to $1,020.3 million as of March 31, 2011 from $813.4 million as of September 30, 2010. Long-term debt remained at $904.9 million as of March 31, 2011.
The company de-leveraged its balance sheet with its debt-to-capitalization ratio improving to 32.8% as of March 31, 2011 from 57% as of December 31, 2010 and 62% as of September 30, 2010.
Rockwell Automation has a strong global market presence. The company focuses on further expanding its global footprint in emerging markets, as it expects automation growth rates in these markets to be higher than growth rates in developed countries. Growth in emerging markets is the company’s key to meeting its target of deriving 60% of revenues from outside the U.S. by 2013.
As it enters new markets, Rockwell Automation intends to broaden its portfolio of products, services and solutions. Successful diversification into emerging markets and expansion of its product portfolio will drive the company’s top-line growth over the long term. The company currently retains a Zacks #3 Rank (short-term Buy recommendation).
Based in Milwaukee, Wisconsin, Rockwell Automation Inc. is an original equipment manufacturer of industrial automation equipment, application specific integrated software and consulting design services. The company is a leading global provider of industrial automation power, control, and information solutions. Rockwell Automation competes with the likes of ABB Ltd. (ABB), Emerson Electric Co. (EMR) and Siemens AG (SI).
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