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Business process and document management company Xerox Corp. (XRX - Analyst Report) recently announced a 35% year-over-year hike in its dividend payout to a quarterly payment of 5.75 cents per share or 23 cents on an annualized basis. The first quarter 2013 dividend is payable on Apr 30 to shareholders of record as of Mar 28.

Based on the closing price of $7.86 on Feb 20, 2013, the proposed dividend affirms a yield of 2.9%. A steady dividend payout is a part of the long-term strategy of Xerox to provide attractive risk-adjusted returns to its stockholders.

The company also has a share repurchase program in place, under which it repurchased shares worth $1.05 billion in 2012. Xerox has consistently returned significant cash to its shareholders through dividends and share repurchases. In 2013, the company intends to have similar share repurchase levels as in the previous year.

The recent dividend hike follows the strong quarterly results that helped the company to beat the Zacks Consensus Estimates. The company also has a healthy liquidity position. Cash and cash equivalents aggregated $1.2 billion at year-end 2012, while free cash flow for the year was $2.1 billion.

Headquartered in Norwalk, CT, Xerox is a leader in the development, manufacture, marketing, servicing and financing of document equipment across the world. The company also provides extensive leading-edge document technology, services, software and genuine Xerox supplies for graphic communication and office printing environments of any size.

The company has three segments – Technology, Services and Others. Xerox is looking forward to expanding its offerings through inorganic measures and new acquisitions, which in turn, will help it to add more clients to its portfolio.

However, the company needs to be wary of its competitors, which include formidable names such as NCR Corp. (NCR - Analyst Report) and Digital China Holdings Ltd. (DCHIF), each carrying a Zacks Rank #2 (Buy), while Concurrent Computer Corporation retains a Zacks Rank #1 (Strong Buy). Xerox currently has a Zacks Rank #3 (Hold).

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