Accenture Boosts Quarterly Dividend Payout 10% (ACN)
By: Ned Piplovic,
Accenture plc (NYSE:ACN) rewarded its shareholders with a 13th consecutive annual dividend hike by boosting its quarterly dividend distribution another 10% for the upcoming dividend payout in mid-November 2018.
While the company’s current 1.72% dividend yield seems low compared to overall yield averages in the market, ACN’s current yield is the second-highest yield in the Management Service industry segment. The company began distributing semiannual dividend distributions in 2005 — just four years after its initial public offering — and has hiked its annual dividend distribution every year, generally for its second dividend installment of the year.
For the first five years, Accenture distributed its dividends once per year before switching to semiannual distributions in 2010. However, at the end of September 2018, the company announced that its Board of Directors has approved the proposal to change its distribution to a quarterly dividend payout schedule starting with the first distribution in 2020. The company’s current dividend payout ratio of 43% indicates that the company’s dividend distributions are well covered by earnings and within range of the company’s five-year average ratio.
Additionally, what it lacks in yield, the company made up for by compensating its shareholders with strong share price growth and rewarded investors with a total return of more than 25% over the past 12 months. Investors seeking overall total returns consisting of strong asset appreciation and supported by a moderate dividend income should consider taking a long position before the upcoming October 17, 2018, ex-dividend date. The company will distribute its next dividend payout on the November 15, 2018, pay date to all shareholders of record prior to the October 17 ex-dividend date.
Accenture plc (NYSE:ACH)
Originally founded as the business and technology consulting division of the accounting firm Arthur Andersen in the early 1950s, Accenture plc provides business management, consulting, technology and outsourcing services worldwide. The company’s Communications, Media & Technology segment also provides professional services that help clients accelerate and deliver digital transformation. Additionally, the company provides industry-specific solutions for business enhancements and serves clients in the communications, electronics, high technology, media and entertainment industries. The company’s Financial Services segment helps clients improve cost efficiency, grow their customer base, manage risk and transform their operations. This segment also provides services for its clients in banking, capital markets and insurance industries. The Health & Public Service segment provides research-based insights and consulting services and digital solutions for health care payers and providers, as well as government departments and agencies, public service organizations, educational institutions and non-profit organizations. The Products segment helps clients enhance their performance in distribution, sales and marketing, research, development and manufacturing. This segment serves clients in consumer goods, retail, travel services, automotive, freight and logistics, pharmaceutical, biotechnology and other industries. Lastly, the company’s Resources segment helps clients to develop and implement new business strategies. Following a separation from Andersen Worldwide Société Coopérative in 1989, Accenture plc was incorporated in Dublin, Ireland, where it is currently based.
The company boosted its semi-annual dividend payout by 9.8% from the previous period’s $1.33 dividend payout in the same period last year to the current $1.46 distribution. This current distribution corresponds to a $2.92 annualized dividend payout and a 1.72% forward dividend yield.
Accenture enhanced its total annual dividend payout nearly 10-fold since 2005. Over those 13 consecutive years, the company advanced its total annual dividend payout at an average growth rate of more than 19% per year. While lower than many average sector yields, Accenture’s current 1.72% yield is nearly 20% higher than the 1.44% average yield of all the companies in the Management Services segment, as well as nearly 5% higher than the 1.64% average yield of the segment’s only dividend-paying companies.
The company’s share continued the recent uptrend from its 52-week low of $136.91 on October 10, 2017 and rose more than 27% towards its 52-week peak of $174.14 on October 4, 2018. On October 8, 2018, the share price closed at $169.90, which was 24% higher than the 52-week low from one year earlier and more than 130% higher than it was five years ago.
The combination of the company’s steadily rising dividend payouts and its share price growth provided shareholders with a total return of nearly 29% over the past year. The three-year total return came in at more than 76% and shareholders more than doubled their investments over the last five years with a 150% total return.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.