In order to share more profits with its shareholders, the Board of Directors of Peabody Energy Corporation (BTU) increased the quarterly dividend to 8.5 cents per share from the existing level of 7 cents. The new dividend will be payable on November 26, 2010, to shareholders of record at the close of business on November 4, 2010.
Following the dividend increase, the annualized dividend of Peabody will now total 34 cents per share, a 21.4% growth from the previous annualized dividend of 28 cents. The company had earlier increased the dividend rate during the fourth quarter of 2009, when it was raised by 16.6%.
Peabodyended the third quarter of 2010 with a strong cash balance. The cash and cash equivalents of the company were $1,367.5 million, substantially higher than the year-end level of $988.8 million. If the share outstanding number remains unchanged from the September 30, 2010 level, the company will need $22.8 million to pay the quarterly dividend.
The adjusted earnings of Peabody at the end of third-quarter 2010 were 99 cents a share, which was 8 cents lower than the Zacks Consensus expectation of 91 cents. The company expects earnings for 2010 to range from $2.95 to $3.15 per share.
The Zacks Consensus Estimates for fourth-quarter 2010, fiscal year 2010 and fiscal year 2011 are 90 cents per share, $3.08 per share and $4.58 per share, respectively.
Peabody Energy currently retains a Zacks #3 Rank (short-term Hold rating). We maintain a long–term Neutral rating on the stock due to the uncertainty surrounding the depth and span of the current global downturn.
Based in St. Louis, Missouri, Peabody Energy, is involved in the exploration, mining and production of coal for its global consumers.
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