Monday, April 02, 2012

Gaining strength, KCS initiates cash dividend

Written by  Luther S. Miller, Senior Consulting Editor

In a sign of growing financial strength, Kansas City Southern's board of directors has decided to initiate a quarterly cash dividend for holders of its common stock.

A first-quarter 2012 dividend of $0.195 per share is payable on April 27 to stockholders of record at the close of business on April 16.

"KCS' continued excellent operating and financial performance, improved balance sheet, and positive long-term outlook were the primary catalysts behind the Board's decision to initiate a quarterly cash dividend to stockholders," said President and Chief Executive Officer David L. Starling.

"We believe that in 2012, KCS will continue on a growth trend similar to that of the past year; namely mid-single digit volume growth, mid-single digit pricing and low-double digit revenue growth," Starling said.

"As a company with abundant future growth opportunities, as well as sufficient cash on hand and strong cash flows, we believe KCS can continue to be a leading growth company while returning cash to our stockholders," Starling said.

The dividend will represent a payout of approximately $85.6 million on an annualized basis., a per-share yield of approximately 1.15% based on KCS' common stock price at the close of trading on March 30.

Standard & Poor's on March 27 upgraded KCS' credit rating to B+ with a positive outlook, one level below an investment grade rating,