Covidien Announces Dividend Increase of 16% to $0.26

Covidien

today announced that its Board of Directors has declared a 16% increase in the quarterly dividend rate, from $0.225 per ordinary share to $0.26 per ordinary share. “This increase reflects our good performance to date in 2012, our commitment to enhance shareholder value and the Board's confidence in our future growth prospects,” said José (Joe) E. Almeida, Chairman, President and CEO. “Both the Board and our senior management team are confident that our expected cash flow generation over the next several years will support future dividend increases and a higher dividend payout ratio. “This increase is consistent with our commitment to balance cash return to shareholders with reinvestment in our business,” Almeida added. “In the last twelve months, we have returned 83% of our free cash flow to shareholders through dividends and stock buybacks, well above our recently increased target of 50%. We intend to expand the dividend payout ratio and are planning future dividend increases which exceed expected EPS growth.”