Joy Global’s dividend
In a volatile environment, Joy Global (JOY) has been struggling to grow its revenue. To combat the unpredictable global commodity scenario, JOY has taken a proactive step to cut its dividend. The company will further resort to cutting its dividend if required. Over the last two years, JOY has repurchased 9.8 million shares worth $533 million. However, the company hasn’t repurchased shares during the last two quarters (fiscal 1Q16 and 2Q16).
Joy Global’s fiscal 2Q16 dividend
For fiscal 2015, Joy Global (JOY) has paid around $78 million in dividends to shareholders. On December 16, 2015, JOY announced a cut its quarterly dividend. The company reduced it to $0.01 per share in fiscal 1Q16 from $0.20 per share in fiscal 4Q15. This step was taken due to a sharp unexpected loss in fiscal 4Q15. Without the dividend cut, the annual cash outlay in fiscal 2016 would be $75 million. On April 4, JOY paid its 2Q16 dividend of $0.01 per share.
JOY is a part of the Guggenheim S&P MidCap 400 Pure Value ETF (RFV) and accounts for 3.3% of its total holdings. Investors in this ETF may benefit if JOY exceeds 2Q16 revenue and earnings expectations. U.S. Steel Corporation (X) and Talen Energy Corporation (TLN) are also among the top ten holdings of RFV. They account for 2.9% and 2.6%, respectively, of RFV’s holdings. JOY is also a part of SPDR S&P 500 Index (SPY).
In the next part of this series, we’ll compare Joy Global’s valuations to those of other mining equipment stocks.