Dividend increase Emerson
At the 6th of November the board of directors of Emerson decided to increase the quarterly dividend from $ 0,48 to $ 0,485 per quarter. This means an increase of $ 0,02 per share per year which translates to a 1,0% increase. The dividend is paid on december the 11th 2017 to shareholders of record on November the 17th 2017. This is the 60th consecutive annual increase.
Since I have 24 shares this increase means that my yearly dividend for Emerson is now $ 46,56, up from $ 46,08 or a $ 0,48 increase in yearly dividends. After taxes I will receive $ 39,58 per year from the company.
This increase means Emerson currently yields 3,08% and my yield on cost rises to 4,22%.
Another 1% increase from Emerson and I don’t have to expect much more in the coming years. Emerson is in the middle of a restructuring program. They sold some divisions and are now replacing the lost revenue with new purchases. They have a long term goal of reducing the FCF pay out ratio to under 50%. To do this they repurchase 500 million Dollar in shares each year and they keep the amount they pay in dividends roughly the same. This results in the increases of 1% a year. The expectation is that this will continue until 2020 / 2021. In other words, I don’t have to expect any big increases from Emerson in the coming 3 to 4 years. After that it should be better again if everything goes according to plan.
I do have a good feeling about the restructuring plan. Emerson had a nice YoY increase in revenue and earnings and it seems they are on the right track. We keep a hold on Emerson and see where this will lead us.
What do you think of Emerson? And of the latest dividend increase?