Accenture Continues to Hike Its Dividend



Dividend payment history

Accenture’s (ACN) uninterrupted dividend payment strategy on a half-yearly basis has made the stock attractive to its investors. It continues to enhance shareholder wealth through regular dividend payments.

In fiscal 4Q17, Accenture raised its semiannual dividend by 10% to $1.33 per share. This was the fifth time in a row that the company had hiked its dividend over the last five years. In fiscal 1Q18, the company paid back $854 million in dividends compared to $785 million in the previous year’s quarter.

Article continues below advertisement

In the graph above, we can see Accenture’s increasing dividend payment trend over the last four years. In fiscal 2017, the company paid nearly $1.6 billion in dividends. Moreover, in the last four years, the company has paid a total of $5.6 billion in dividends at an average of nearly $1.4 billion every year.

Dividend yield and peer comparison

At present, the dividend yield for the company stands at 1.7%. The current dividend yields of other software players International Business Machines (IBM), Oracle (ORCL), and Microsoft (MSFT) stand at 3.8%, 1.5%, and 1.8%, respectively.

At the end of fiscal 1Q18, Accenture’s free cash flow stood at $872 million. In the last four years, the company has maintained an average free cash flow of nearly $3.9 billion every year. The company also expects to return nearly $4.3 billion to its shareholders through share buybacks and dividend payments in fiscal 2018.

Such robust free cash flow coupled with lower leverage could encourage Accenture to sustain a strong dividend payment policy going forward.


More From Market Realist