Global cruise vacation company Royal Caribbean Cruises Ltd. (RCL - Free Report) recently announced a 25% hike in quarterly dividend to 60 cents per share. The dividend will be paid on Oct 11, 2017, to shareholders of record as on Sep 22. The new raise will take the annual dividend to $2.40 a share.
This marks the company’s sixth consecutive year of a dividend hike. Royal Caribbean made the last dividend increase of 28% in September 2016. Prior to that, it had increased dividends by 25% in September 2015, 20% in September 2014, more than doubled its dividend to 25 cents per share in September 2013 and hiked it by 20% in September 2012.
Consistent dividend hikes serve as an indicator of a company’s financial stability and its ability to sustain profits. Royal Caribbean seems to be in a stable financial position with net cash from operating activities of $1.7 billion in the first half of 2017 compared with $1.3 billion in the year-ago period.
Royal Caribbean’s steady dividend history is likely to make it an attractive investment choice for value investors or investors seeking a stable stream of investment income. The company’s attempt at enhancing long-term shareholders’ value, even in a volatile economic environment, is appreciable.
The company’s stock has also been performing well of late. Shares of the company have gained 44.8% so far this year when compared to the industry’s gain of 21.8%. Also, the Zacks Consensus Estimate for earnings in the last 60 days for the current quarter and year have moved north by 6.1% and 3.3%, respectively.
We believe that the recent dividend hike will bolster investors’ confidence in the company’s financials, improve its market position against competitors and lend more upside to this Zacks Rank #2 (Buy) company.
Other Stocks to Consider
A few other top-ranked stocks in this sector are Town Sports International Holdings, Inc. (CLUB - Free Report) , Carnival Corporation (CCL - Free Report) and Callaway Golf Company (ELY - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the trailing four quarters, Town Sports, Carnival and Callaway Golf pulled off an average positive earnings surprise of 52.48%, 9.08% and 23.29%, respectively.
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