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Analyst Blog

In tune with its efforts to boost stockholders’ return, Waddell & Reed Financial, Inc. (WDR - Analyst Report) hiked its quarterly cash dividend on its Class A common stock by 21% over its previous dividend to 34 cents. The dividend will be paid on Feb 3, 2014 to shareholders of record as of Jan 13, 2014.

Waddell & Reed’s history of increasing quarterly dividend reflects its long-term strategy to provide attractive returns to shareholders. Hence, it is a smart pick for investors looking for high dividend yield stocks. Even during the financial crisis when many banks and investment managers slashed or discontinued dividend payments, Waddell & Reed not only continued with its payout but managed to increase it as well.

Apart from regular dividend payments, Waddell & Reed’s has an effective share buyback program in place. The company repurchased around 1.2 million shares for $52.5 million during the first nine months of 2013.

Waddell & Reed’s steady capital deployment activities reflect its strong balance sheet position. As of Sep 30, 2013, cash and cash equivalents were around $623 million compared with $547 million as of Jun 30, 2013. Total stockholders’ equity recorded $612 million, as against $563 million as of Jun 30, 2013.

Apart from Waddell & Reed, some other firms in the finance sector that enhanced shareholders’ value in the recent past include Franklin Resources Inc. (BEN - Analyst Report), Lazard Ltd. (LAZ - Analyst Report) and Westamerica Bancorp. (WABC - Analyst Report). Franklin hiked its quarterly dividend by 20% to 12 cents per share, Westamerica announced a 2.7% increase in its quarterly cash dividend to 38 cents while Lazard declared a special dividend of 25 cents per share on its outstanding Class A common stock.

Waddell & Reed currently carries a Zacks Rank #1 (Strong Buy).