Continental triples share dividend estimates
Continental AG has announced that the company plans to pay a dividend of 1.5 euros per share for the 2011 fiscal year, almost tripling analyst estimates of 0.55 euros. Based on the approximately 200 million shares outstanding, the proposed amount to be distributed totals roughly 300 million euros. This equates to a payout ratio of about 24 per cent, according to an official statement on the subject.
Not surprisingly analysts welcomed the news: “This is a big positive for Conti shareholders as it underpins their confidence in their free cash flow this year [which is estimated to be around 600 million euros] and also shows its commitment to the minority shareholders which is important…” Morgan Stanley’s Vikash Patel wrote in an investor’s note.
Continental is due to report its financial results on 1 March. Morgan Stanley reported that Conti’s shares are the second best performing automotive stock this year having improved 46 per cent. In its meeting on 13 March, the supervisory board of Continental AG will finally resolve upon the adoption of the Financial Statements for fiscal 2011 and the dividend payment proposal for the Annual Shareholders’ Meeting.