Kroger Co (KR) will raise its quarterly dividend by 12.5 percent to 18 cents per share in 2020. This comes after a 14.3 percent dividend increase to $0.16 per share in 2019. The supermarket operator has now raised its dividend for 14 consecutive years and is one of just a few large-cap companies listed on US exchanges to announce a dividend hike during the COVID-19 pandemic.
The next quarterly dividend of $0.18 per share will be paid on September 1, 2020 to shareholders of record as of close of business on August 14, 2020. The new annualized dividend rate of 72 cents per share translates into a 2.2% dividend yield at a stock price of $33.50 for Kroger.
In its press release announcing this dividend hike Kroger states that it continues to expect, subject to board approval, an increasing dividend over time. "Kroger's 13 percent dividend increase reflects our ability to deliver strong free cash flow during uncertain times and throughout the economic cycle," said Rodney McMullen, Kroger's chairman and CEO. "It also reflects the Board of Directors' confidence in both our business model and our commitment to return value to shareholders and achieve consistently attractive total shareholder returns."
Kroger has now raised its dividend by at least double digits in each of the last three years with an average dividend hike of 11.4 percent in the last five years. The biggest dividend increase in the last decade was announced in 2012, when Kroger boosted its dividend by 30.4 percent. The smallest hike was announced in 2017 with a 4.2 percent increase.
The company currently pays approximately $560 million in annual dividends to shareholders. The stock has gained almost 16 percent year-to-date, resulting in a market cap of $26 billion for The Kroger Co.
The Kroger Co. operates supermarkets and multi-department stores throughout the United States. Kroger operates supermarkets under a variety of local banner names, including pharmacies, fuel centers and jewelry stores. The company's brands include Baker's, City Market, Dillons, Food 4 Less, Foods Co, Fred Meyer, Fry's, Gerbes, Harris Teeter, King Soopers, Jay C Food Store, Kroger, Owens Market, Pay-Less Super Markets, QFC, Ralphs and Smith's Food and Drug. The Kroger Co. was founded in 1883 and incorporated in 1902.