Prepare and submit a historical dividend analysis of your target company in power-point or similar software. Your target company should be a US listed public company, mid-cap or small-cap in size, that pays a dividend. For the definition of Midcap, select a company that is less than $14B in market cap. In the video, I suggest $12 Billion but giving you a little flexibility to find a company you are interested in by going a little bigger. Remember, it must have paid a dividend in the past! This is an individual exercise.
Most firms return less in cash than they have available to return. Whether they will find themselves under pressure or relatively untouched will depend upon how much stockholders trust the managers of the firm to use the cash wisely.
Stockholders will tend to be less aggressive about demanding that the cash be returned to them for firms
with a good investment track record
in a sector with high returns
where managers have substantial equity stakes in the firm.
They will tend to be most aggressive when these conditions do not hold.
Assignment Overview
Objective: Analyze how the firm has returned cash to shareholders
Historical Dividend Analysis
Identify how much the firm has paid in dividends over the past 5 years?
How much stock has the firm repurchased over the past 5 years?
Has the firm paid a special dividend?
What is the firms dividend yield? How has it changed over the past 5 years?
What is the firms payout ratio? Has it been consistent?
Compare the firms dividend yield and payout ratio to the industry (or its top 3-5 competitors).
Summarize and provide any other comments that you feel are relevant to the firms’ dividend policy.