Avery Dennison Eyes Dividend Increase
Avery Dennison (NYSE: AVY), the California-based maker of labels, office products and related fare, said it will be in a position to boost its dividend in the second half of this year and a share buyback plan may accompany the higher dividend.
That's welcome news for shareholders that endured Avery Dennison's 50% dividend cut last year.
The company slashed its payout to conserve cash and reduce its debt load. Avery Dennison is on pace to lower its debt burden by $350 million this year.
Most of Avery Dennison's free cash flow is generated in the second half of the year, making it easier for the company to digest a dividend increase in the summer or fall than earlier in the year.
The dividend hike would likely take Avery Dennison's quarterly dividend to 25 cents a share from 20 cents, according to Bloomberg data. Avery Dennison shares currently yield 2.3%.
Wednesday, 26 May 2010 00:51
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Can You Hear Me Now? China’s Story Loud and Clear
It seems that many financial writers, bloggers and internet denizens are having trouble accepting the remarkable China growth story. When China announced that the nation’s first quarter growth had hit a blazing 11.9 percent annualized, many scoffed. How could it be, they wondered, that the American colossus would still be suffering and European flailing while China prospered? Beijing must be fudging the numbers, many concluded.
Now we have strong, reliable data from outside sources that bolster the ongoing China growth story. Taiwan has just announced stunning first quarter economic expansion numbers. They are the best in three decades. The island’s government says gross domestic product rose 13.27 percent in the three months of this year, the greatest expansion since 1978.
Who gets the credit? China, of course.
Global Insight also believes that China’s massive stimulus program boosted high-tech and other sales in the second half of last year. Taiwanese electronics and computer firms export their parts and components to China for assembly before they are re-exported around the world. One of the giants of the industry, Taiwan Semiconductor (TSM) the island’s biggest company, has forecast that revenues will rise this quarter to a record $3 billion, and permit the company to expand its workforce and production.
With more than a thousand Chinese missiles aimed at Taiwan's shores, the Taiwanese have little reason to polish China's growth statistics, although China's new president has been trying to cool previous warlike rhetoric between the island and the mainland. Taiwan is also heavily invested in manufacturing facilities on the mainland of China.
to Taiwan in the first quarter outnumbered Japanese for the first time…The statistics bureau said that Chinese visitors tripled in the first quarter from a year earlier.”
Chinese tourism has helped expand the service economy dramatically. The service sector surged
a very noteworthy 42 percent during the first quarter.
China’s wealth effect has also influenced other regional economies. Singapore’s GDP grew an annualized 38.6 percent from the previous three months in the first quarter. Japan’s economy expanded at the fastest pace in three quarters on stronger exports, although its domestic economy is still mired in stagnation.
Despite the long term trend of Chinese expansion, short term volatility caused by European and U.S. instability continues to roil the stock markets. That’s why I’ve recently recommended that subscribers to the
China Stock Digest purchase some hedging instruments to balance out current risk and volatility.
China’s world-beating growth story has once again proven to be real, although Chinese stocks are not immune to extreme global volatility.