Moody’s Shares Up After Buyback Announcement

Moody's CEO Ray McDaniel reported an increased annual dividend to $1.00 per share.
Moody's CEO Ray McDaniel reported an increased annual
dividend to $1.00 per share.
Image: Shutterstock
  Last week, Moody’s Investors Services was happy to tell shareholders that it planned on providing a higher dividend and would be buying back $1 billion worth of shares.  Moody’s CEO Ray McDaniel told shareholders, "Moody's results for the second quarter reflected continued strong operating performance across the Company. We are pleased to announce we have increased our annualized dividend to $1.00 per share. We also now anticipate total 2013 share repurchases of approximately $1 billion. Our EPS guidance range for 2013 remains $3.49 to $3.59."

  This week, shares of Moody’s were up several points since the call, ranging from the low sixties to nearly sixty nine dollars per share.  The new dividends, which are like a bonus some companies choose to pay their shareholders as a way of spreading the profits, will be paid quarterly beginning on September 10, 2013.  Moody’s has been gradually increasing its dividend since 2009, up from 10 cents four years ago.  At the current stock price the planned buyback would be about 15 million shares.  So far this year, stock prices have increased over 30%. 


  Berkshire Hathaway, whose CEO is Warren Buffet, is the largest shareholder of the credit ratings agency.  Both Buffet and Moody’s have been large critics of U.S. government mismanagement.  Moody’s recently warned the U.S. that pension debts are largely underestimated and will need great scrutiny.  In spite of the criticism, Moody’s has also said that the out look of the U.S. economy is stable.

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