Medical device giant
, its visions of growth recently clipped when its drug-coated stent program hit a regulatory wall, reinstated a quarterly dividend Tuesday, joining a host of other maturing technology companies returning cash to stockholders.
The Indianapolis-based company declared an 8-cent quarterly dividend, payable June 30 to shareholders of record June 16. The company suspended its previous dividend in November 1998.
"Given the company's strong cash flow and financial position, payment of a dividend to our shareholders is an appropriate decision at this time," said Guidant CEO Ronald Dollens in a prepared statement. "In addition to providing shareholder value through dividends, Guidant will continue to aggressively pursue strategic investments in new products, market development and acquisitions."
Guidant joins a growing list of technology companies planning to pay dividends ahead of President Bush's push to eliminate the income tax on them. Last week, communications-chip company
declared a 5-cent dividend, while Microsoft reached into its deep pockets in January and said it planned a small payout, joining technology goliaths
Most of these companies are rich in cash, with waning growth prospects. On a midquarter conference call last week, Guidant executives reportedly told analysts that there may be signs of a slowdown in the market for pacemakers, but conceded there would not be more visibility until later in the quarter. The company recently saw its hopes to market a drug-coated stent ended by the FDA.
Guidant investors sent shares of the company up 82 cents, or 2.44%, to $34.39 in late day trading.