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Dividend Roundup: RFIL, FDX, UPS, SUNS, FSC, MAIN, ARCO, MCD, HIMX

Here are the five latest dividend-related developments featured on The Dynamic Dividend:

RF Industries Ups Dividend Another 25%

RF Industries Ltd. (RFIL) declared a quarterly dividend of $0.025 per share within this morning’s second quarter earnings release, pushing its payout higher by 25%. This is the second consecutive quarter the provider of interconnect products has raised its dividend.

Shares of RFIL opened Tuesday’s session trading at $3.69, where they now feature a 2.71% dividend yield.

RFI reinstated its dividend last September after skipping its payout for two quarters. The company gave shareholders a 33% raise and split its stock in February. Today’s announcement brings RFI’s cumulative 2011 dividend growth to 67%.

FedEx Delivers 8% Dividend Hike

FedEx Corporation (FDX) declared a quarterly dividend of $0.13 per share after today’s closing bell, pushing its payout higher by 8.3%. The company has increased its annual dividend total every year since initiating its payout in 2002, though it could certainly afford to grow its payout much more aggressively.

Shares of FDX closed Monday’s session trading at $87.75, where they yield just 0.59%.

It may have a decent dividend growth streak, but FedEx has never shown much interest in rewarding shareholders with a sensible chunk of its earnings, perpetually holding its forward payout ratio below 10% (it stands at just 7.98% even after today’s dividend hike).

While I don’t consider either stock very attractive right now, at least rival UPS (UPS) is returning 42% of its future earnings to shareholders. As a result, UPS currently yields 2.96% — a little more than five times what FedEx shares pay — despite trading at a very similar earnings multiple.

Solar Senior Capital Initiates Quarterly Dividend

Solar Senior Capital Ltd. (SUNS) declared a monthly dividend of $0.05 per share. The business development company completed its initial public offering earlier this year.

Shares of SUNS opened Monday’s session trading at $18.01, where they now carry a 3.33% dividend yield. The company’s IPO made 8 million shares of common stock available at a price of $20 per share in late February, and the stock has yet to close above $19.60 since its first trading day.

Analysts currently expect Solar Senior Capital to earn $1.56 per share in 2012, giving the company a very manageable 38.5% forward payout ratio. Given those expectations and the requirement that BDCs return 90% of their taxable earnings to shareholders — not to mention its low yield compared to other companies within the same industry — this is likely just a starting rate for Solar while it puts its IPO proceeds to work.

If you’re looking for more mature BDCs that return cash to shareholders in monthly installments, a couple of companies to check out are Fifth Street Finance (FSC) and Main Street Capital (MAIN).

Arcos Dorados Initiates Quarterly Dividend

Arcos Dorados Holdings Inc. (ARCO) declared a quarterly dividend of $0.0597 per share this morning. This is the first payout from the world’s largest McDonald’s (MCD) franchisee since completing its initial public offering in April.

The Brazilian company operates more than 1,750 locations stretching 19 countries and territories in Latin America and the Caribbean. (“Arcos Dorados” is Spanish for “Golden Arches.”)

Shares of ARCO opened Monday’s session trading at $23.29, where they feature a shiny new 1.03% dividend yield.

Today’s press release did not clarify whether this payout is adjusted to accommodate for the shorter duration of the company’s second quarter, which is abbreviated a bit due to the IPO. If it is prorated, obviously the stock’s dividend yield is a little juicier. Arcos Dorados executed its IPO on April 14, essentially one-sixth of the way through its second quarter. Extrapolating the payout to represent a full quarter would result in a dividend yield of roughly 1.24%.

Himax Cuts Dividend by More Than 50%

Himax Technologies Inc. (HIMX) declared an annual dividend of $0.12 per American Depositary Share this morning, more than halving its payout. This is the third consecutive year the Taiwanese semiconductor company’s dividend has declined.

HIMX is currently trading at $2.04, where its new dividend rate produces a 5.88% yield.

Himax initiated an annual dividend of $0.20 per ADS in 2007, and bumped it up to a peak of $0.35 the following year. But it has reduced its payout every year since. Last year the company paid a dividend of $0.25 per ADS.

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Dynamic Dividend
The Dynamic Dividend is a website dedicated entirely to dividend stock news, tools, tips, and ideas.

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