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Kansas City Southern (KSU) Cheers Investors Via Dividend Hike

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In a shareholder-friendly measure, Kansas City Southern announced a 23% hike in its quarterly dividend of 44 cents per share on all its common shares. This move is commendable, especially given the challenges the company is facing due to disruptions caused by the coronavirus.

The new dividend of 54 cents per share (annually: $2.16) is payable Apr 7, 2021 to the shareholders of record as of Mar 8. The dividend yield based on the new payout and Feb 4’s closing price is 1.02%. Notably, this is the second dividend raise by the company within a few months. Notably, in November 2020, the company’s board of directors approved a 10% increase in its quarterly dividend to 44 cents per share on all its outstanding common shares.

Apart from highlighting Kansas City Southern’s commitment to create value for its shareholders, the dividend hikes in a short span of time underscore its strong financial condition and bright prospects. Moreover, the latest dividend hike is in line with this railroad operator’s approach to maintain a target payout ratio in the low 20% range.  Also, a look at the past records vouches for the company’s stable dividend payment history.

As investors prefer an income-generating stock, a high dividend-yielding one is much desirable. It’s needless to say that they are always on the lookout for companies with a consistent and incremental dividend record. Management of this currently Zacks Rank # 2 (Buy) player also announced that the annual meeting of its shareholders will be held on May 20, 2021.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other transportation stocks that have upped their quarterly dividends so far in 2021 despite the coronavirus-led adversities include GATX Corporation (GATX - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Norfolk Southern (NSC - Free Report) .

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