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Accenture Continues to Hike Its Dividend

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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.

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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.

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