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
The goal of every dividend investor is to generate dividend income that is larger than their annual expenses. This coveted goal is called th...
I have been a dividend growth investor for over 7-8 years now. The reason why I have somewhere between 85% - 90% of my networth in dividend ...
Dividend growth stocks are the gift that keeps on giving . I like the fact that most of the work in selecting good dividend growth stocks is...
As a dividend investor, my main goal is to attain financial independence when dividend income exceeds expenses by an adequate margin of saf...
I love it when the stock market goes on sale, like it has been so far in the past two - three weeks. For aspiring dividend growth investors,...
There are many risks to investing . One of the major risks that could ruin a portfolio’s chances of generating adequate dividends are p...
One of the biggest sins in investing, is investing money without a clear plan or strategy to accomplish specific goals . This investing sin...
Before I begin my message, I wanted to wish all my readers a Happy 4th of July. And I wanted to thank all of those military members for keep...
How do you define success? To me, success is the freedom to do my own thing, and the ability to reach my goals. Given the fact that I am a f...
McDonald's Corporation (NYSE:MCD) franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the...