Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5976
    -0.0030 (-0.50%)
     
  • NZD/EUR

    0.5532
    -0.0011 (-0.19%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    83.07
    +1.72 (+2.11%)
     
  • GOLD

    2,240.30
    +27.60 (+1.25%)
     
  • NASDAQ

    18,267.49
    -13.35 (-0.07%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,829.90
    +69.82 (+0.18%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • NZD/JPY

    90.4050
    -0.3750 (-0.41%)
     

Brown-Forman Woos Shareholders with Stock Split & Dividend

Brown-Forman Corporation’s BF.B commitment to shareholders has been vital in its success story. The company has a tradition of returning cash to shareholders through regular dividend payouts and share repurchases. Reaffirming this commitment, the company has approved various capital deployment actions that will benefit shareholders, employees and community.

As part of these actions, the company proposed a stock split and a special dividend, alongside bringing additional funds for its defined benefit program and creating a charitable foundation. These initiatives clearly reflect the strength of the company’s balance sheet and healthy business. Further, these positives are bolstered by the expected benefits from the tax reform.

Stock Split

Brown-Forman has proposed a five for four stock-split for its Class A and Class B common stocks. The company plans to distribute one Class B share for every four shares of either Class A or Class B held. Additionally, the company stated that any fractional shares are payable in cash. The stock split will be carried out in the form of a dividend on both Class A and Class B shares, payable in shares of Class B. The record date for the stock split is Feb 7, 2018, while the company anticipates distributing additional shares and cash for fractional shares to shareholders by Feb 28. This split will add to the company’s history of stock splits marking the 14th split since its listing in 1934.

Special Dividend

Additionally, the company announced a special cash dividend of $1.00 per share on both Class A and Class B shares. This dividend is payable on Apr 23, to shareholders with record as on Apr 2. The company estimates the dividend to amount to $480 million after the stock split is completed.

The company’s board has also announced a regular cash dividend of 15.8 cents on both Class A and Class B shares, which reflects the four for five stock split. The company plans to distribute this dividend on Apr 2, to shareholders with record as on Mar 5.

Other Actions

Apart from the stock split and dividend, which benefits shareholders, the company has decided to fully fund its current pension liability of $120 million. This will further strengthen its key employee retirement benefit. Furthermore, the company plans to create a foundation with $60-$70 million contribution, which will help in funding Brown-Forman’s charitable endeavors in the communities where its employees live and work.

Moreover, the company revealed that it will provide an updated guidance for fiscal 2018, including the impact of the tax reform, along with third-quarter fiscal 2018 results in early March.

The news did not have a major impact on the company’s share price. However, this Zacks Rank #1 (Strong Buy) stock has surged 22.5% in the last three months, outperforming the industry’s growth of 2.9%.

Brown Forman Corporation Price, Consensus and EPS Surprise

Brown Forman Corporation Price, Consensus and EPS Surprise | Brown Forman Corporation Quote

ADVERTISEMENT

Want More of Alcohol Stocks? Check These

Investors interested may also consider stocks such as Boston Beer Company Inc. SAM, Constellation Brands Inc. STZ and Craft Brew Alliance BREW. While Boston Beer sports a Zacks Rank #1 (Strong Buy), Constellation Brands and Craft Brew carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Boston Beer delivered an average positive earnings surprise of 63.4% in the trailing four quarters. It has a long-term earnings growth rate of 5%.

Constellation Brands delivered an average positive earnings surprise of 11.9% in the trailing four quarters. It has a long-term earnings growth rate of 19%.

Craft Brew has an average positive earnings surprise of 250.2% in the trailing four quarters. In addition, the stock has gained 7.9% in the past three months.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Brown Forman Corporation (BF.B) : Free Stock Analysis Report
 
Constellation Brands Inc (STZ) : Free Stock Analysis Report
 
Craft Brew Alliance, Inc. (BREW) : Free Stock Analysis Report
 
Boston Beer Company, Inc. (The) (SAM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research