Disney Increases Dividend by 50%

By Rob Golum and Andy Fixmer - Dec 1, 2011 7:21 AM GMT+0700

Walt Disney Co. (DIS), owner of the namesake theme parks and ESPN sports network, increased its annual dividend by 50 percent, the most in at least 20 years, following record sales and profit.

The new 60-cent dividend, up from 40 cents, will be paid on Jan. 18 to shareholders of record as of Dec. 16, the Burbank, California-based company said today in a statement.

Disney, also owner of the ABC TV network, is returning cash to investors through stock repurchases as well. The company bought back $5 billion of shares in the year ended Oct. 1, according to a Nov. 10 statement. Disney last increased its dividend one year ago, boosting the payment to the current 40 cents from 35 cents previously. Bloomberg historical data going back to 1990 don’t show an increase this large.

“The hike showed an unexpectedly higher order of magnitude, more so for a somewhat conservatively managed Disney,” Tuna Amobi, a Standard & Poor’s analyst, said in an e- mail. The “move also seems consistent with large media’s refocus on increased return of capital to shareholders,” said the analyst, who recommends the stock.

The Steven P. Jobs Trust, Disney’s largest shareholder, will reap $82.8 million, an increase of $27.6 million based on the 138 million shares held by the estate of Apple Inc.’s late co-founder.

Disney rose 5.4 percent to $35.85 at the close in New York, a day when the Dow Jones Industrial Average advanced 4.2 percent and every company in the 30-stock index gained. Disney has declined 4.4 percent this year.

2011 Results

“The Walt Disney Company had a great creative, strategic and financial year,” Robert A. Iger, president and chief executive officer, said in the statement. “We are pleased to be able to raise our shareholder dividend by 50 percent while continuing to invest for future growth.”

The company on Nov. 10 reported a 21 percent increase in fiscal 2011 profit to $4.81 billion, or $2.52 a share, on revenue that gained 7.4 percent to $40.9 billion.

Disney was expected to raise its dividend by 5 cents to 45 cents, according to data compiled by Bloomberg. An increase to 65 cents is forecast for next year, according to the data.

At the new dividend rate, Disney has an indicated yield of 1.67 percent, compared with 2.12 percent for the S&P 500 stock index, according to Bloomberg data.

To contact the reporters on this story: Rob Golum in Los Angeles at rgolum@bloomberg.net; Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net