The board of directors of Whirlpool Corp. (WHR) is set to increase the quarterly dividend on its common stock to 50 cents per share from 43 cents per share, reflecting a hike of 16.3%. The increased dividend is payable on June 15, 2011, to stockholders of record as of May 20, 2011. It will result in a dividend yield of 0.59% based on the share price of April 18, 2011.

This is the company’s first dividend increase in the past 7 years. Previously, Whirlpool hiked its dividend from 34 cents per share to 43 cents per share during the first quarter of 2004.

The recent rise in dividend reflects the company’s improving financial condition, strengthening brand position, positive impact from continuous investments in the emerging markets as well as its competitive prowess in the domestic markets.

In order to maintain its leadership position and improve its market share, Whirlpool has strategically targeted the emerging economies, which have huge potential going forward. The emerging economies of Asia and Latin America, particularly China, India and Brazil, are expected to witness strong demand for appliances in the near future.

Last year, the company exhibited noticeable improvements in Latin America and Asia, despite higher material costs and unfavorable foreign currency fluctuations. Shipments to Latin America climbed 18% while those to Asia jumped 9%.

As a result, Whirlpool reported robust results during the fourth quarter and fiscal 2010. Net profit almost doubled to $171 million or $2.19 per share from $95 million or $1.24 per share in the prior-year quarter. In full year 2010, net profit increased significantly to $7.97 per share from $4.34 per share in 2009.

Sales for the fourth quarter went up 4% year over year to $5 billion while sales for the full year rose 7% to $18.4 billion. The company expects higher shipment growth of 5%–10% in Brazil and 6%–8% in Asia.

The shares of Whirlpool Corp. are maintaining a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating.

 
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