plc (NYSE: COV) today announced that its Board of Directors has declared a 23% increase in the quarterly dividend rate, from $0.26 per ordinary share to $0.32 per ordinary share.
“This increase reflects our good performance to date in 2013 and our confidence in further growth,” said José (Joe) E. Almeida, Chairman, President and CEO. “We remain committed to using our strong cash flow to fund business expansion, while returning at least 50% of our free cash flow to shareholders through dividends and share repurchases. In the last twelve months, we have exceeded this target, returning over 125% of our free cash flow to shareholders.
“As we have previously announced, the Company intends to continue to increase its dividend and is targeting a dividend payout ratio -- dividends paid per share divided by adjusted earnings per share -- in excess of 35% over time,” Almeida added. "Because of this, we expect dividends to increase at or above the rate of earnings growth for the next several years."
At the new rate, the annual dividend is $1.28 per ordinary share compared to the previous rate of $1.04 per ordinary share. The next quarterly dividend is payable on November 5, 2013, to shareholders of record on October 10, 2013.
Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading products in medical devices and supplies. With 2012 revenue of $9.9 billion, Covidien has 38,000 employees worldwide in 70 countries, and its products are sold in over 140 countries. Please visit
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NON-GAAP FINANCIAL MEASURES
This press release contains a financial measure, free cash flow, which is considered a “non-GAAP” financial measure under applicable Securities & Exchange Commission rules and regulations.