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PolyOne Corporation (POL - Snapshot Report) has hiked its quarterly cash dividend by 33% to 8 cents per share from the prior payout of 6 cents. The increased dividend will be paid on Jan 9, 2014, to stockholders of record as of Dec 17, 2013.

This is PolyOne’s third dividend increase and a doubling since it re-instituted its quarterly cash dividend at 4 cents per share in Mar 2011.

The dividend hike was backed by PolyOne’s healthy earnings. Its adjusted earnings per share jumped 29% year over year to 36 cents per share in third quarter of 2013 from 28 cents a year ago.  This represented the 16th consecutive quarter of double-digit adjusted earnings per share increase.

Revenues also increased 43% year over year to $1 billion from $708 million a year ago. The increase in revenues was due to the acquisitions of Spartech and Glasforms along with organic growth in Specialty and Distribution.

The dividend increase is also a testimony to the company’s healthy balance sheet.  It also testifies PolyOne’s commitment to meet aggressive targets and create shareholders’ value. PolyOne ended the third quarter with $323 million of cash and over $630 million of liquidity.

PolyOne, holding a strong liquidity position, expects to continue to deploy cash by investing in research and development, commercial resources, realigning the Spartech assets and in selective merger and acquisition. The company further expects to continue returning cash to its shareholders through dividend and share repurchases.

PolyOne accredits its four-pillar strategy for the strong third-quarter results. The company’s commitment to execute this strategy enables it to achieve new record profitability and earnings per share.

While PolyOne considers fourth-quarter 2013 to be seasonally the weakest, the company believes it can continue to deliver double-digit adjusted earnings per share growth in the quarter. The projection is attributable to current trajectory of organic growth and upside from Spartech synergy capture. PolyOne has reaffirmed its goal to achieve adjusted earnings of $2.50 per share by 2015.

PolyOne, which is among the prominent players in the chemical-plastics industry along with Kraton Performance Polymers Inc. (KRA - Snapshot Report), is a leading provider of specialized polymer materials, services and solutions.

PolyOne currently retains a Zacks Rank #3 (Hold).

Other companies in the chemical-plastics space worth considering include Westlake Chemical Corp. (WLK - Snapshot Report) and A. Schulman, Inc. (SHLM - Snapshot Report). Both carry a Zacks Rank #2 (Buy).

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