Kroger (KR) Announces Stock Split, Buyback, Dividend Increase - Stocks in the News

how is a stock split different from a stock dividend

By June 25, 2015, 08:11:18 PM EDT

The Kroger Co. ( KR ) announced today that its Board of Directors have approved a new buyback program, a 2:1 stock split, and an increase in the quarterly dividend. Already one of the biggest names in the retail industry, Kroger has given the market even more to talk about.

All about Kroger

Kroger is one of the largest grocery store and supermarket retailers in the country. With nearly half a million employees and over 2,500 stores, the company has a foothold throughout the United States. While most notable for the "Kroger" branded stores, they actually operate under 12 different local banners. The company also owns convenience stores, jewelry stores, gas stations, and food processing plants.

Kroger currently has a Zacks Rank #3 (Hold). Earnings estimate revisions are pretty split for KR, with some analysts lowering expectations for this quarter and others revising them upwards. However, all of 4 revisions in the last 30 days for Kroger's yearly earnings estimates have been positive, showing good signs for the potential of long-term growth. Kroger did beat the Zacks Consensus Estimate in Q1, earning $1.25 against the expected $1.24. We have

also given Kroger "A" grades in all three of our Style Score categories.

Today's announcement

The first part of today's announcement detailed a 13.5% increase of the quarterly dividend. Investors will now receive a dividend of 21 cents per share. This will be paid after the split, so shareholders will actually receive 10.5 cents per split-adjusted share. The 2:1 split will occur on July 13 for all shareholders with proven ownership before closing on June 6. The company also announced a $500 million buyback program, a replacement for a prior authorization which has been exhausted (also read 3 Stock Splits to Watch After Netflix ).

All of these announcement may or may not have an effect on share prices, which remained relatively flat today. Moving forward, investors should stay in-tune with Kroger, as a lot is going on in the coming weeks.

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Category: Forex

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