Kroger Approves 17% Hike in Quarterly Dividend


American retailer The Kroger Company (KR) has hiked its quarterly dividend by 17% to $0.21 per share.

The dividend is payable on September 1 to shareholders of record on August 13. The company’s annual dividend comes to $0.84 per share, which reflects a dividend yield of 2.1%.

CEO of Kroger Rodney McMullen said, “In recognition of our strong performance during the last year, we are proud to increase the quarterly dividend at a higher rate than our historical average.”

McMullen added, “This increase reflects the Board of Directors’ confidence in the strength of our free cash flow and our ability to deliver consistently strong and attractive total shareholder returns.”

On June 17, Kroger reported upbeat Q1 results driven by accelerating growth in digital sales. Adjusted earnings of $1.19 per share came in above the consensus estimate of $1.01 per share. Total revenues were $41.3 billion and outpaced the consensus estimate of $39.78 billion. Digital sales grew 16% year-over-year. (See Kroger stock chart on TipRanks)

On June 22, Northcoast Research analyst Chuck Cerankosky reiterated a Buy rating on the stock but increased his price target to $46 (17.5% upside potential) from $41. Cerankosky also raised his earnings per share forecasts for fiscal 2021 and 2022.

Overall, the stock has a Hold consensus rating based on 1 Buy, 10 Holds, and 5 Sells. The average KR analyst price target of $38.46 implies 1.8% downside potential from current levels. Shares have increased 19.4% over the past year.

TipRanks data shows that financial blogger opinions are 100% Bullish on KR compared with the sector average of 72%.

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