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Dow Chemical (DOW) Board Approves $1.5B Share Repurchase Program; Declares Dividend

 February 15, 2013 12:24 PM

(By Balaseshan) Dow Chemical Co. (NYSE: DOW) said its board has approved a share repurchase program, authorizing the buy-back of up to $1.5 billion of its common stock. In addition, the chemical products manufacturer declared dividend.

"This repurchase program underscores the board's confidence in Dow's earnings, cash flow and growth potential as we continue executing against our strategic agenda, and illustrates our ongoing commitment to increasingly reward shareholders," said Andrew Liveris, Dow's chairman and chief executive officer.

Going forward, the company's three priorities for uses of cash will remain consistent: further deleveraging, returning value to its shareholders and investing for attractive, high-margin organic growth in its downstream businesses.

[Related -Calculating A Stock's Fair Value Based On Future Growth Expectations: Part 2A]

Purchases under the share buy-back program may be made over time in open market or privately negotiated transactions. This represents the latest action in a series of measures Dow has taken to increasingly reward shareholders.

In a separate release, the company said it has declared a dividend of 32 cents per share, payable April 30, 2013, to shareholders of record on March 28, 2013. The annual dividend works out to $1.28 a share.

The dividend yield works out to 3.70% and the five-year average yield represents 5.50%, while the dividend payout ratio works out to be 93%. Growth rate for three year-average and five-year average period is 28.15% and 4.58% respectively.

[Related -Dividend Roundup: AME, CA, CVC, DOW, NUS, NWL, WTR]

This marks the 406th consecutive cash dividend issuance, Dow Chemical noted. Dow has paid its shareholders cash dividends every quarter since 1912. In 2012, the company reported a 34% rise in dividends declared versus 2011.

DOW is trading down 0.18% at $32.43 on Friday. The stock has been trading between $27.45 and $36.08 for the past 52 weeks.

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