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Dividend Roundup: HST, PFLT, HEI, BBY, CASY

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

Host Hotels Takes Another Small Step Toward Dividend Recovery

Host Hotels & Resorts Inc. (HST) declared a quarterly dividend of $0.03 per share this morning, increasing its payout by a penny. This is the second consecutive quarter with a dividend hike from the hotel-focused REIT, which spent the previous three years slashing its payout.

Host paid a peak quarterly dividend of $0.40 per share at the end of 2007, but spent the next two years cutting, suspending, and paying partially with stock until eventually resetting its payout at $0.01 per share to start 2010. Last quarter the company upped its quarterly rate to $0.02 per share, its first dividend hike in more than three years.

Shares of HST opened Wednesday’s session trading at $15.95, where they now feature a 0.75% dividend yield.

Another Monthly Dividend in the BDC Space

PennantPark Floating Rate Capital Ltd. (PFLT) declared a monthly dividend of $0.05 per share today, the business development company’s first since going public two months ago.

The company’s IPO on April 8 was a bit of a flop: It offered 10 million shares for $15 apiece, but only managed to sell 6.7 million at that rate. The stock closed the day trading at just $13.40, and has yet to approach its original offer price. The company focuses on floating rate loans to private companies and is managed by PennantPark Investment Advisors just like its sister fund, PennantPark Investment Corporation (PNNT).

Shares of PFLT are currently trading at $12.80, where they now feature a 4.69% dividend yield. The company expects the monthly dividend to increase as they ramp up their fledgling portfolio. That’s probably realistic, especially given management’s track record: PNNT has already raised its dividend five times since initiating its payout in 2007.

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). Solar Senior Capital (SUNS) also initiated a monthly dividend just last week.

HEICO Gives Shareholders a 25% Raise

HEICO Corporation (HEI) announced it’s holding its semiannual dividend at $0.06 per share this morning, resulting in a 25% raise for shareholders. This will be the company’s first dividend since completing a 5-for-4 stock split back in April.

On a split-adjusted basis, HEICO’s previous two dividends were each $0.048 per share. HEICO has more than quadrupled its payout over the last ten years as a result of dividend hikes and split maneuvers like this.

Shares of HEI opened Tuesday’s session trading at $52.21, where they yield just 0.23%.

Best Buy Tops Q1 Estimates Ahead of Next Week's Dividend Hike

Best Buy Co. Inc. (BBY) reported first quarter results that topped Wall Street’s estimates this morning, sending shares higher in pre-market trading.

The big box electronics retailer posted earnings of $0.35 per share on $10.9 billion in revenue, topping the consensus views for both profit ($0.33 per share) and sales ($10.7 billion). Operating income fell 10% year-over-year, while revenue grew 1% and same store sales fell 1.7%.

Despite slipping profits and declining same store sales, shares of BBY popped to $30.67 (+6.42%) in pre-market trading, where they feature a 1.96% dividend yield.

Best Buy initiated its dividend in 2003 and has raised its annual output every year since, tripling its payout in the process. The company traditionally announces its dividend hike on the day of its annual shareholders meeting, including last year’s 7% boost. This year’s meeting is one week from today, and given the company’s paltry 16% forward payout ratio and its lagging stock price, I would be stunned if the board opted not to reward its patient shareholders with another raise.

Casey's Closes Year With Yet Another Dividend Hike

Casey’s General Stores Inc. (CASY) declared a quarterly dividend of $0.15 per share within today’s mixed fourth quarter earnings release, which is an 11% improvement over the $0.135 paid each of the previous three quarters by the company. This is the third time Casey’s has given its shareholders a raise in the past year alone.

The convenience store operator has now grown its payout by a total of 76% over the last 12 months thanks to dividend hikes of 18%, 35% and now 11%. Casey’s has improved its annual dividend total by at least 10% every year dating back to 2000, achieving 800% dividend growth over that short period.

As for its fourth quarter performance, Casey’s posted adjusted earnings of $0.60 per share on $1.55 billion in revenue, blowing away the consensus profit view ($0.50 per share) despite falling short of the average sales estimate of $1.57 billion.

Shares of CASY closed Monday’s session trading at $41.03, where they now feature a 1.46% dividend yield.

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Dynamic Dividend
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