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| 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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