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A Look at Stryker’s Recent Dividend Announcement

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Quarterly dividend payment

On February 7, 2018, Stryker (SYK) announced a quarterly dividend of $0.47 per share. This dividend will be payable on April 30, 2018, to shareholders of record on March 29, 2018. This represents the company’s 2Q18 dividend payment.

The company announced a dividend of $0.47 per share during 1Q18. Stryker’s indicated annual dividend is $1.88 per share. The dividend rate of $0.47 per share represents an ~11% rise from the company’s previous dividend rate of $0.43 per share.

Stryker has paid increasing dividends for the last seven consecutive years. During 2017, Stryker paid out dividends of ~$636 million compared to ~$568 million in 2016.

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Stryker’s capital allocation strategy

Stryker has a capital allocation strategy that prioritizes acquisitions, dividends, and stock buybacks in that order. Stryker is always keen to invest capital in strategic M&As (mergers and acquisitions). After M&As, the company has prioritized dividend payments as its capital allocation strategy so as to return value to its shareholders.

Until 2009, Stryker paid annual dividends to its shareholders, but since then, the company has made quarterly dividend payments. During 2017, Stryker allocated $831 million to M&As. The company’s most recent acquisition was Entellus Medical, which it announced in December 2017. For details on the deal, read Stryker Expands with Entellus Acquisition. The company bought back shares for a total of $230 million during the same period.

As of February 26, 2018, Stryker has a dividend yield of 1.16, whereas its peers Medtronic (MDT), Zimmer Biomet Holdings (ZBH), and Thermo Fisher Scientific (TMO) have dividend yields of 2.29, 0.81, and 0.32, respectively.

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