Ingersoll Rand’s dividends and buyback
In fiscal 2015, Ingersoll Rand (IR) paid around $303 million in dividends to shareholders. With the buyback of IR shares worth $250 million, or a repurchase of 4.4 million shares, the company has effectively given back $553 million to shareholders in 2015.
The future of Ingersoll Rand’s dividends
IR plans to return $332 million to shareholders in 2016 by way of dividends. This implies a share dividend of $1.28 for 2016. That’s an increase of 10% over 2015. Accomplishing this dividend target for 2016 means IR will have successfully achieved an annual dividend CAGR (compound annual growth rate) of 24% since 2011.
Ingersoll Rand enhances its shareholder value by repurchasing the bulk of its own shares when its stock price falls. The company follows a pattern of buying when the stock price is corrected. When the price increases, it dials back its repurchase agreement. IR is a pioneer in managing share capital.
Why do Ingersoll Rand’s dividends matter?
IR’s dividends matter since they have been consistently increasing since 2011. That says a lot about the company. In a volatile environment in which companies are struggling to grow their revenue, IR has increased its 2016 dividend target. This can be attributed to its strong cash flow and balance sheet.
IR is part of the Guggenheim Mid-Cap Core ETF (CZA) and accounts for 2.0% of the total holdings. Viacom (VIA) and DTE Energy Holding (DTE) are among the top ten holdings of the fund. They make up 2.8% and 2.3%, respectively, of CZA. IR is also part of the S&P 500 (SPY).