Viacom was “due for an increase,” Wells Fargo Securities analyst Marci Ryvicker says — although she expected a 20% bump. The company raised its dividend on May 25, 2011, and June 9, 2010. Also, it’s generating cash and has a healthy balance sheet. She figures Viacom will make $560M in dividend payments over the next 12 months, equal to about 20% of its free cash flow. CEO Philippe Dauman says that “returning value to our shareholders is a priority for Viacom.” Shares ended the day up 0.7% at $47.21. Here’s the announcement:
NEW YORK, May 23, 2012 — Viacom Inc. (NASDAQ: VIA and VIAB) today announced that its Board of Directors has approved a 10% increase in its quarterly dividend to $0.275 per share of Class A and B common stock from $0.25 per share.
The increase will take effect beginning with Viacom’s next quarterly dividend, payable on July 2, 2012 to stockholders of record at the close of business on June 15, 2012.
Viacom President and CEO Philippe Dauman said, “We are pleased that our consistently strong cash flows and solid balance sheet have allowed us to increase our dividend rate for the second time in the two years of our dividend program. Returning value to our shareholders is a priority for Viacom, both in our dividend policy and our stock buyback program, which we maintain alongside our ongoing and robust investment in our leading global brands.”