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The board of directors of McCormick & Co., Inc. (MKC - Analyst Report) recently announced an 8.8% increase in its quarterly dividend, from 34 cents to 37 cents per common share. This translates to an annual dividend of $1.48 per share for 2014, up from $1.36 per share for 2013. The annual dividend yield is now 2.1%. The first increased quarterly dividend will be paid on Jan 14, 2014 to shareholders of record as of Dec 31.

This food company has been paying dividends every quarter since 1925 and this marks the 28th consecutive hike in dividend. Over the past 10 years, dividend per share has risen at a compound annual growth rate of 12%. The last dividend hike of 9.7% was announced on Nov 27, 2012 and paid on Jan 14, 2013.

Besides dividend, the company also has a solid buyback program in place. On the share buyback front, McCormick’s board authorized a new share repurchase program in Apr 2013 to purchase up to $400 million of its outstanding shares. The company’s existing share repurchase program of $400 million is expected to be complete in 2013.

We appreciate McCormick’s efforts to consistently enhance long-term shareholder value amid a volatile economy. While dividend payments boost shareholder wealth, a share buyback program helps the company to reduce outstanding share count, thereby increasing earnings per share and return on equity.

Over the long term, this Zacks Rank #3 (Hold) company expects higher cash flow and more efficient asset utilization with the anticipation of growth in net income and reductions in working capital.

Other food companies have also raised their quarterly dividend payments in November. Sysco Corp. (SYY - Analyst Report) increased its quarterly dividend by 3.6% from 28 cents to 29 cents and Pinnacle Foods Inc. (PF - Snapshot Report) raised it by 16.7% from 18 cents to 21 cents per common share. Another company, J&J Snack Foods Corp. (JJSF - Snapshot Report) announced a 100% increase in its dividend to 32 cents.

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