Will Walt Disney (DIS) Stock be Affected After Announcing 15% Dividend Hike?

NEW YORK (TheStreet) -- The Walt Disney Co. (DIS) announced on Wednesday afternoon that it increased its cash dividend for the first half of 2015 by 15%. The dividend will be payable on July 29 to shareholders on record as of the close of trading on July 6.

"Disney delivered significant increases in revenue, net income and EPS for the first half of fiscal 2015. We are pleased to raise our dividend 15% on an annualized basis, as well as increasing the frequency of our dividend payments," Disney CEO Robert Iger said in a statement.

Disney declared a cash dividend of 66 cents per share.

Shares of Disney closed lower by 0.52% to $113.81 on Wednesday afternoon. By the end of trading, 5.52 million shares of Disney had exchanged hands as compared to its average daily volume of 5.76 million shares.

Disney's latest animated Pixar film "Inside Out" opened last weekend with a record $91.1 million domestic launch. This was Disney/Pixar's second highest opening weekend ever. In 2010 the studio's "Toy Story 3" earned $110.3 million in its debut weekend.

Separately, TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DIS's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 7.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DISNEY (WALT) CO has improved earnings per share by 13.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT) CO increased its bottom line by earning $4.25 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($5.07 versus $4.25).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 10.0% when compared to the same quarter one year prior, going from $1,917.00 million to $2,108.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Media industry and the overall market, DISNEY (WALT) CO's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Net operating cash flow has increased to $2,918.00 million or 15.47% when compared to the same quarter last year. In addition, DISNEY (WALT) CO has also modestly surpassed the industry average cash flow growth rate of 15.14%.
  • You can view the full analysis from the report here: DIS Ratings Report

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