Legg Mason Hikes Dividend - Analyst Blog
April 25 2013 - 1:10PM
Zacks
In an attempt to boost shareholder value, Legg Mason,
Inc.’s (LM) board of directors approved an increased
quarterly cash dividend on its common stock. The new dividend of 13
cents per share reflects an 18% increase from the prior dividend of
11 cents. The new dividend will be paid on Jul 8 to shareholders of
record as of Jun 11.
The dividend raise is part of Legg Mason’s commitment to increase
shareholders’ wealth. The company is effectively deploying capital
through share repurchase and dividend hike. In fact, Legg Mason has
been increasing its dividend consistently since 2010.
Prior to this revision, in Apr 2012, the company announced a 37.5%
hike in its dividend to 11 cents. Previously, in Jun 2011, Legg
Mason raised its dividend by 33.3% to 8 cents. Moreover, in 2010,
the company hiked its dividend twice, in June and in December.
We believe that Legg Mason has the potential to outperform its
peers in the long run, given its diversified product mix and
leverage to the changing market demography. However, in the near
term, asset outflows will remain a significant headwind.
However, we foresee improved operating efficiencies for Legg Mason
from its restructuring initiatives and cost-cutting measures.
Legg Mason is expected to announce its results for the fiscal
fourth-quarter (ended Mar 31) on Apr 30. The Zacks Consensus
Estimate for the quarter is 58 cents per share. The Zacks Earnings
ESP (Read: Zacks Earnings ESP: A Better Method) for Legg Mason is
+16.97%. This, along with its Zacks Rank #3 (Hold), makes us
confident of a positive earnings surprise.
Other asset managers that are performing better than Legg Mason
include Apollo Global Management, LLC (APO),
Virtus Investment Partners, Inc. (VRTS) and
Waddell & Reed Financial Inc. (WDR). All these
stocks carry a Zacks Rank #1 (Strong Buy).
APOLLO GLOBAL-A (APO): Free Stock Analysis Report
LEGG MASON INC (LM): Free Stock Analysis Report
VIRTUS INVESTMT (VRTS): Free Stock Analysis Report
WADDELL&REED -A (WDR): Free Stock Analysis Report
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