Power Tool Maker Black & Decker Cuts Quarterly Dividend By 71%
- April 30, 2009
- Dividend News, Dividend Stocks
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Black & Decker (BDK: 0.00 N/A) announced today that they are cutting their quarterly dividend by 71% to $.12 per share.
The dividend cut reduces Black & Decker’s current dividend yield from 4.4% to 1.3%.
Nolan D. Archibald, Chairman and Chief Executive Officer, commented, “Black & Decker has paid a dividend consistently since 1937, and remains committed to returning cash to its stockholders through regular dividends. In today’s uncertain and challenging economic environment, however, we believe it is important to preserve liquidity. By lowering the dividend to $0.12 per quarter, we will reduce cash outflows by $54 million in 2009. This action, along with lower capital expenditures and tighter working capital management, will strengthen our balance sheet, improve our credit metrics and provide greater financial flexibility. It is consistent with the conservative financial approach we have taken throughout the credit crisis, including our recent bond offering. While a dividend reduction was not an easy decision to make, we are confident that it is in the best long-term interest of our stockholders.”
The dividend reduction is expected to save the company approximately $70 million annually and $54 million in 2009.
The dividend will be payable on June 26, 2009 to shareholders of record as of June 12, 2009.
The markets responded positively to news of the dividend cut sending BDK shares up 5.3% to $40.30 per share. Since the beginning of the year, Black & Decker’s share have fallen less than 4% compared to the 7% decline in the Dow Jones index.
