Kroger's Board of Directors Raises Quarterly Dividend by 10%
Kroger's Board of Directors has approved a 10% increase in the annual dividend, raising it from $1.16 to $1.28 per share. The next quarterly dividend of 32 cents per share will be paid on September 1, 2024, to shareholders of record as of August 15, 2024.
This marks the 18th consecutive year of dividend increases, with Kroger's dividend growing at a 13.5% compounded annual growth rate since 2006. The increase reflects confidence in Kroger's business model, consistent operating results, and strong free cash flow, enabling the company to return value to shareholders while investing in growth.
- 10% increase in annual dividend to $1.28 per share.
- Next quarterly dividend of 32 cents per share to be paid on September 1, 2024.
- 18th consecutive year of dividend increases.
- Dividend has grown at a 13.5% compounded annual growth rate since 2006.
- Strong free cash flow enables return of value to shareholders.
- None.
Insights
Kroger's decision to increase its quarterly dividend by 10% signals a positive outlook for its financial health and commitment to rewarding shareholders. A dividend increase from
This dividend hike marks the 18th consecutive year of increases, indicating consistent growth and stability. For retail investors, this trend of dividend increases is appealing as it suggests reliable returns. It’s essential to note that dividends are paid from free cash flow, which means Kroger is not only profitable but also has sufficient liquidity.
From a financial perspective, compounded annual growth rate (CAGR) of 13.5% since 2006 highlights Kroger's ability to sustain growth. This can be particularly appealing for income-focused investors looking for steady cash returns. Additionally, reinvesting dividends can further compound returns over time.
Rating:
Kroger's capital allocation strategy is noteworthy for its balanced approach. By investing in the business to drive long-term growth while maintaining an investment-grade debt rating, Kroger demonstrates a prudent financial strategy. This balance is important in ensuring sustainable growth and financial stability.
For retail investors, understanding this strategy is key. Long-term sustainable earnings growth means the company is not just focusing on short-term gains but is investing in future profitability. Maintaining an investment-grade debt rating implies low credit risk, which is a positive indicator for investors concerned about financial stability.
Moreover, Kroger’s ability to return capital to shareholders through dividends suggests a shareholder-friendly approach. This is attractive for investors seeking both income and growth potential in their investment portfolios.
Rating:
Kroger's quarterly dividend has grown at a
"The dividend increase is a reflection of the Board of Directors' confidence in the strength of our diverse model," said Rodney McMullen, Kroger's Chairman and CEO. "Kroger is delivering consistent operating results and generating strong free cash flow, which enables us to return value to shareholders while investing to grow our business."
Capital Allocation Strategy
Kroger's capital allocation strategy is to use its free cash flow to invest in the business to drive long-term sustainable net earnings growth while also maintaining its current investment grade debt rating and returning capital to shareholders. The company actively balances the use of its free cash flow to achieve these goals.
About Kroger
At The Kroger Co. (NYSE: KR), we are dedicated to our Purpose: to Feed the Human Spirit™. We are, across our family of companies nearly 420,000 associates who serve over eleven million customers daily through a seamless digital shopping experience and retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.
This press release contains certain statements that constitute "forward-looking statements" about the future performance of the company. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words or phrases such as "continues," "deliver," "expect," "goals," and "strategy." Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-looking statements. These include the specific risk factors identified in "Risk Factors" in our annual report on Form 10-K for our last fiscal year and any subsequent filings, as well as the following:
Kroger's ability to achieve sales, earnings, incremental FIFO operating profit, and adjusted free cash flow goals may be affected by: the risks relating to or arising from our proposed nationwide opioid litigation settlement, including our ability to finalize and effectuate the settlement, the scope and coverage of the ultimate settlement and the expected financial or other impacts that could result from the settlement; our proposed transaction with Albertsons, including, among other things, our ability to consummate the proposed transaction and related divestiture plan, including on the terms of the merger agreement and divestiture plan, on the anticipated timeline, with the required regulatory approvals, and/or resolution of pending litigation challenging the merger; labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in the labor market; changes in government-funded benefit programs; changes in the types and numbers of businesses that compete with Kroger; pricing and promotional activities of existing and new competitors, and the aggressiveness of that competition; Kroger's response to these actions; the state of the economy, including interest rates, the inflationary, disinflationary and/or deflationary trends and such trends in certain commodities, products and/or operating costs; the geopolitical environment including wars and conflicts; unstable political situations and social unrest; changes in tariffs; the effect that fuel costs have on consumer spending; volatility of fuel margins; manufacturing commodity costs; supply constraints; diesel fuel costs related to Kroger's logistics operations; trends in consumer spending; the extent to which Kroger's customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; stock repurchases; changes in the regulatory environment in which Kroger operates; Kroger's ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry, including pharmacy benefit managers; Kroger's ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of Kroger's future growth plans; the ability to execute our growth strategy and value creation model, including continued cost savings, growth of our alternative profit businesses, and our ability to better serve our customers and to generate customer loyalty and sustainable growth through our strategic pillars of fresh, our brands, personalization, and seamless; and the successful integration of merged companies and new partnerships. Our ability to achieve these goals may also be affected by our ability to manage the factors identified above. Our ability to execute our financial strategy may be affected by our ability to generate cash flow.
Kroger assumes no obligation to update the information contained herein unless required by applicable law. Please refer to Kroger's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties.
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SOURCE The Kroger Co.
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