We saw quite a few companies cut dividends last year, but some have remained confident in their profitability and continued to reward shareholders with cash. McGraw-Hill is now not only increasing its dividend, but also resuming share buybacks.
The Board of Directors of The McGraw-Hill Companies approved the 37th consecutive annual increase in the regular quarterly cash dividend on the company’s common stock. The quarterly dividend will increase 4.4% from $0.225 to $0.235 per share. It will be payable on March 10th to shareholders of record on February 24th. The new annualized dividend rate of $0.94 per share represents an average compound annual dividend growth rate of 9.9% since 1974, the company noted.
“Our financial strength and strong growth prospects worldwide have enabled us to extend our long record of annual dividend increases and to resume our share repurchase program, actions that clearly demonstrate the Board’s ongoing commitment to increasing shareholder value. Since 1996, we have returned approximately $9.4 billion to shareholders through dividend payments and share buybacks,” said CEO Terry McGraw.
The McGraw-Hill Companies has paid a dividend each year since 1937 and declared that it is one of fewer than 30 companies in the S&P 500 that has increased its dividend annually for the last 37 years.
Beginning in 2010, McGraw-Hill said it will buy back over time the 17.1 million shares remaining in its share repurchase program approved by the board of directors in 2007. The shares will be purchased from time to time on the open market, subject to market conditions. Historically, the company said, approximately 43% of the shares repurchased have been used to reduce the corporation’s number of outstanding shares. The McGraw-Hill Companies had approximately 315 million diluted weighted average shares outstanding at the end of 2009.