by Marc Bastow | May 30, 2013 9:47 am
Cloud storage and information technology services company EMC (EMC) announced today that it will both expand its existing share buyback program and initiate a dividend, based on confidence in its long term business strategy and prospects. Shares in the Hopkinton, Massachusetts based company jumped over 4% in early-day trading on the news.
The buyback approved by the Board of Directors will increase its authorization to repurchase shares from $1 billion in 2013 to to $6 billion over a 3-year period that ends December 31, 2015. EMC anticipates spending $3.5 billion by the end of Q2 2014, which includes $500 million spent on buybacks in 2013 to date.
EMC’s dividend of 10 cents per share on a quarterly basis (40 cents per share per year) will be paid on July 23 to shareholders of record on July 1, with an ex-dividend date of June 27. EMC’s dividend yield based on the payout stands at 1.6%.
EMC also announced it will tap the debt markets to raise cash, although it doesn’t expect the move to have any significant impact in its financial results for the remainder of 2013.
EMC joins the list of technology companies that have recently initiated a dividend policy, including Oracle (ORCL) which began paying a dividend in 2009, and Cisco (CSCO), which started paying dividends in 2011.
Written by Marc Bastow, Assistant Editor at InvestorPlace.com. who as of this writing did not hold a position in any of the aforementioned securities.
Source URL: http://investorplace.com/2013/05/354133-emc-orcl-csc/
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