Dow Chemical Hikes Dividend, Boosts Share Buyback

(RTTNews) - Chemical products maker Dow Chemical Co. (DOW) said Wednesday that its board of directors has increased the quarterly dividend by 14 percent and also approved a $5 billion tranche to its share repurchase program, bringing the company's share repurchase target to $9.5 billion.

The Midland, Michigan-based company's board declared a 14 percent increase in the company's dividend to $0.42 per share from $0.37 per share, in the fourth quarter. This brings the company's annualized dividend to $1.68 per share.

Meanwhile, the new $5 billion tranche to the company's share repurchase program brings the total share repurchase program to $9.5 billion.

Andrew Liveris, Dow Chemical's chairman and chief executive officer said, "Today's announcement serves as a firm indication of our Board's confidence in Dow's fortified balance sheet position and future earnings potential, and further illustrates our commitment to consistently and increasingly rewarding shareholders."

The fourth-quarter dividend of $0.42 per share will be payable on January 30, 2015 to shareholders of record on December 31, 2014. This will mark the 413th consecutive cash dividend issued by the company.

Dow noted that it has paid its shareholders cash dividends every quarter since 1912. Since 2009, Dow's dividend has increased by 19 percent on a compound basis.

Dow said that under the share repurchase program, it might purchase shares in open market or privately negotiated transactions. The company has committed to complete its previous $4.5 billion share repurchase program by year-end. This new tranche brings Dow's total target to $9.5 billion.

In October, Dow Chemical reported an increase in profit for the third quarter from last year on higher revenues. The company's third-quarter net income rose to $852 million or $0.71 per share from $594 million or $0.49 per share in the year-ago period. Net sales for the quarter grew 5 percent to $14.41 billion from $13.73 billion last year.

DOW is trading at $50.08, up $0.56 or 1.13 percent on a volume of 62,003 shares.