ConAgra Foods Inc. (CAG) raised its quarterly dividend by 5.3%
just three days after boosting earnings expectations.
Over the last year dividend boosts were scarce as the financial
crisis intensified, but they have been returning as the global
economy stabilizes. Standard & Poor's said in July the number
of companies that raised dividends hit a record low in the second
quarter, while the number of companies that cut their dividends was
the largest in more than 50 years.
ConAgra on Friday credited the 1-cent dividend boost to 20 cents
a share to its "strong earnings outlook and healthy annual cash
flows." The increase will cost the company $18 million a year.
Tuesday, ConAgra posted earnings that topped Wall Street's
expectations, helped by cost cuts and solid performances from
brands such as Hunt's sauces and Healthy Choice meals. That led the
company to raise its fiscal-year earnings forecast to $1.70 a share
from $1.63 to $1.66.
Like other packaged food makers, ConAgra has benefited from a
moderation in commodity costs, which has helped profit margins. The
company also has benefited during the economic downturn as
consumers spend more on eating at home.
ConAgra shares closed Thursday at $21.74 and were inactive
premarket. The stock is up 11% in the past year, outperforming the
broader market.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com;