Garmin Ltd. Reports Earnings, Proposes Dividend Increase
February 22, 2018
GRMN Stock Returning Cash to Investors
It’s not easy for consumer electronics companies to pay an increasing dividend, but Garmin Ltd. (NASDAQ:GRMN) has been doing just that.
On February 21, Garmin announced that its board of directors plans to increase the company’s annual cash dividend to $2.12 per share, which would represent an almost-four percent increase from the current $2.04 per share. If the plan gets approved at the company’s annual meeting in June, the dividend will be paid in four quarterly installments of $0.53 per share, with the first payment to be made on June 29, 2018 to shareholders of record as of June 18. (Source: “Garmin Reports Solid Fiscal 2017 Revenue and Operating Income Growth; Proposes Dividend Increase,” Garmin Ltd., February 21, 2018.)
From 2012 to 2017, GRMN stock’s quarterly dividend rate had increased by almost 28%. (Source: “Garmin Ltd. Dividend Date & History,” NASDAQ, last accessed February 21, 2018.)
The proposed dividend increase is backed by a growing business. Garmin also reported earnings on Wednesday. In the fourth quarter of 2017, the company generated $888.0 million of total revenue, representing a three percent increase year-over-year. Growth was driven by Garmin’s aviation, fitness, marine, and outdoor segments, which collectively delivered a nine percent revenue increase. (Source: Garmin Ltd., op. cit.)
Top line growth translated to the bottom line. Excluding non-recurring items, Garmin generated adjusted earnings of $0.79 per share in the fourth quarter, up nine percent from the year-ago period.
Both top and bottom line numbers beat Wall Street’s expectations. Analysts were expecting earnings of $0.76 per share on $871.0 million of revenue.
And the best could be yet to come. Management expects Garmin to generate $3.2 billion of total revenue in full-year 2018, which would be almost a 3.7% increase from the prior year. Earnings for the current year are expected to grow to $3.05 per share, up from the $2.94 per share earned in 2017.
If the company can achieve its guidance, GRMN stock investors will likely have more dividend increases to look forward to.
