Avery Dennison (AVY) just declared a quarterly dividend of 0.20/share, which represents a 50% decrease from last quarter’s payment of 0.41/share. The company reduced its dividend to support debt reduction efforts. The company also reported $0.56 in 2Q earnings per share, which didn’t provide sufficient coverage for the dividend. In a previous article I outlined Avery as one of the companies whose dividend are at risk. Avery Dennison has been unable to cover its dividend payment over the past several quarters.
"The possibility of continued poor market conditions beyond 2009, along with increased pension funding requirements, compels us to take precautionary action," CEO Dean A. Scarborough said.
"The size of the dividend reduction reflects a combination of the company's near-term debt reduction target, as well as our target to pay a cash dividend of 40 to 50 percent of normalized earnings over time," he said, adding that when the company's outlook improves, it expects to raise its dividend." ( source)
This dividend cut ended Avery Dennison’s 32-year streak of consecutive annual dividend increases for this dividend aristocrat. The company last raised its distributions in December 2007. I didn’t own any stock in Avery, but If I did I would have sold it immediately after the news.
Avery Dennison Corporation (AVY) is engaged in the production of pressure-sensitive materials, office products and a variety of tickets, tags, labels and other converted products. The Company's segments are Pressure-sensitive Materials, Retail Information Services and Office and Consumer Products.
In contrast, there were 28 dividend increases in the elite dividend index so far in 2009. The companies raising distributions this year include:
To open the spreadsheet in a new window, check here.
This marks the 8th dividend cut in the Dividend Aristocrats index so far in 2009. The other dividend cutters include:
One company, Rohm & Haas was taken over by Dow Chemical (DOW) in the first half of 2009.
Full Disclosure: I have positions in most of the stocks mentioned above
- Dividend Aristocrats keep raising their dividends
- Why do I like Dividend Aristocrats?
- When to sell my dividend stocks?
- High-Yield Dividends at Risk
One of the advantages of being a dividend investor is that I invest in businesses that meet a certain qualitative and quantitative criteria...
I like to invest in quality companies, with an established track record of dividend increases. I want to acquire these quality companies at ...
This guest post has been written by Mike McNeil, passionate investor, founder of Dividend Stocks Rock and author of The Dividend Guy Blog ...
A dividend king is a company that has managed to increase dividends every single year for at least 50 years in a row. There are only 20 com...
Another year has passed here in dividend growth investing land. This was a year with a lot of changes for me. It is time to evaluate what ha...
Today marks the ninth birthday of the Dividend Growth Investor blog. It is unreal that I have managed to keep this up for 9 years in a row. ...
I wanted to thank you all for reading the Dividend Growth Investor website. This site is a result of my efforts to improve my investing over...
CVS Health Corporation (CVS), together with its subsidiaries, provides integrated pharmacy health care services. It operates through Pharmac...
Medtronic, Inc. (MDT) manufactures and sells device-based medical therapies worldwide. This dividend champion has paid dividends since 1977...
The J. M. Smucker Company (SJM) engages in manufacturing and marketing branded food products primarily in the United States, Canada, and int...