Old Dominion Freight Line’s (ODFL - Free Report) board approved a quarterly cash dividend of 15 cents per share, payable to shareholders on Jun 17, of record as of Jun 3.
We remind investors that in February, the company hiked its dividend by 35.3% to 23 cents per share. However, the recently approved dividend is lower because of a three-for-two stock split, approved by the board on Feb 21. This means that one additional share was issued for every two shares of common stock. The additional shares were distributed on Mar 24 at an adjusted price of $150.48. The net effect of the new dividend is equivalent to the total amount returned to its shareholders through dividends in the first quarter of 2020.
Old Dominion’s commitment to reward its shareholders despite coronavirus concerns is appreciable. In the first quarter, the company rewarded its shareholders with $196.6 million through dividend payments and share buybacks. During 2019, Old Dominion, which currently carries a Zacks Rank #3 (Hold), had returned $295.5 million to its shareholders. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
With coronavirus having crippled the domestic economy, Old Dominion’s demand for services has declined substantially. The company reduced its estimated expenditures for real estate during the March quarter by approximately $50 million due to some projects being deferred on account of sluggish shipments. Although the impact was limited in the first quarter, the effect is likely to magnify in the second quarter as supply chain disruptions aggravate.
During the first quarter, Old Dominion’s earnings per share matched the Zacks Consensus Estimate, while revenues fell short of the Zacks Consensus Estimate. Results were affected by a soft freight environment as well as weak demand in the latter half of March due to coronavirus woes. The company’s peers like J.B. Hunt Transport Services (JBHT - Free Report) , Knight-Swift Transportation Holdings Inc. (KNX - Free Report) and Landstar System (LSTR - Free Report) also witnessed substantial softness in first-quarter performance due to the coronavirus concerns.
While J.B. Hunt and Knight-Swift carry a Zacks Rank #3, Landstar carries a Zacks Rank #4 (Sell).
(We are reissuing this article to correct a mistake. The original article, issued on May 22, 2020, should no longer be relied upon.)