Back to top

Analyst Blog

Tractor Supply Company (TSCO - Analyst Report) is an intriguing option for investors seeking both growth and income. The operator of farm and ranch stores in the U.S. announced its decision of a dividend hike, reflecting its plan of utilizing free cash to enhance shareholders’ return, thereby boosting investors’ confidence in the stock.

The Brentwood, TN-based company, raised its quarterly dividend by 23% to 16 cents (or 64 cents annually) from 13 cents a share (or 52 cents annually). The increased dividend will be paid on Jun 3, 2014, to stockholders of record as of May 19. The dividend yield based on the new payout and the last closing market price is approximately 1%.

Dividend hikes not only enhance shareholder’s return but raise the market value of the stock. Through this strategy, the companies try to win investors, thereby persuading them to either buy or hold the scrip instead of selling them.

Investors prefer an income generating stock and a dividend paying stock is always a preferable option. People looking for regular income from stocks are most likely to be inclined toward those companies that have a track record of consistent and incremental dividend payment.

Other companies that recently increased quarterly dividend include Apple Inc. (AAPL - Analyst Report) and Costco Wholesale Corp. (COST - Analyst Report). The companies raised their dividends by 8% to $3.29 and 14.5% to 35.5 cents, respectively. Another company, MetLife, Inc. (MET - Analyst Report) recently hiked its dividend by 27% to 35 cents.

We believe that Tractor Supply continues to progress well with its growth initiatives, which include expanding its store base and incorporating technological advancements to serve clients better. This Zacks Rank #3 (Hold) company leverages an extensive network of stores to penetrate into target markets, which in turn, enables the company to generate healthy sales and gain market share.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%