C.H. Robinson Raises Dividend - Analyst Blog
09 Dezember 2011 - 4:44PM
Zacks
C.H. Robinson Worldwide Inc. (CHRW) has
recently increased its dividend to 33 cents per share, or $1.32 on
an annualized basis. The company dividend was raised from 29 cents
paid previously in the past quarters of 2011. The new dividend will
be payable on January 3, 2012 to shareholders of record on December
20
C.H. Robinson has been paying regular dividends to its
shareholders for more than twenty five years and continues to do
with support from its strong balance sheet and liquidity
position.
Given the company’s third party business model, which requires
less investment on building capital assets, it manages to function
on capital requirements leveraging its optimum cost structure in
the current weaker consumer market. This has
allowed the company to garner surplus cash to fund internal growth,
acquisitions, share repurchases and dividend hikes.
Additionally, the present supply chain dynamics remain favorable
for non-asset based logistics providers like C.H. Robinson as
customers seek overall transportation services like truck,
intermodal and air freight at lower prices. C.H. Robinson can cater
to these customers by utilizing its pool of network carriers to
procure lower transportation costs similar to its market rival
Expeditors International of Washington Inc.
(EXPD).
In the near term, factors like network rationalization and a
tightened truckload market are likely to propel pricing gains for
the company. Additionally, C.H. Robinson is demonstrating efficient
cost control measures.
However, increased headcounts raised employee compensation cost
for the company during the last three quarters of the year. While
the increase in crew capacity is essential to support business
growth, it can offset by pricing and volume growth in the near
term.
We are currently maintaining our long-term Neutral
recommendation on C.H. Robinson supported by the Zacks #3 Rank
(Hold).
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