The group will pay a final cash dividend for 2010 of 2.5p, giving an aggregate declared dividend for 2010 of 5.5p per share.
If the stock is purchased between the date of record and the date the dividend is to be paid, the buyer does not receive the recently declared dividend, and the stock is said to sell ex dividend, or "without dividend".
Declaring dividends may raise stock prices, a point not to be overlooked by avaricious executives and directors holding stock options.
But companies declaring dividends now are not saying what their tax status would be under the new law.
"Unlike reported earnings, cash earnings are available to management to reward shareholders by doing things like paying down debt, declaring dividends or buying back shares".
The extra incentive to declare dividends will weaken balance sheets and increase borrowing, which will also have an upward push on interest rates.
"Usually, boards of directors won't declare dividends or certainly won't increase them if they feel that the companies need those resources for other purposes," said Robert Zagunis, chairman of the investment committee at Jensen Investment Management in Lake Oswego, Ore.
Will they declare dividends, as Microsoft did?
Attempts to rein Twitter in, to close the borders and declare dividends, to capture and bottle the spirit of the times, these are all understandable and yet fundamentally misguided attempts to change the course of biochemical inevitability.
The IRS in December released Revenue Procedure 68-08, which allows REITs to declare dividends in as much as 90% stock and as little as 10% cash while remaining in compliance with IRS requirements to distribute 90% of annual income.
On Feb. 16, the printing solutions company will distribute its first cash dividend of 5 cents per share to all shareholders of record as of Feb. 2. The board said that it intends to continue declaring dividends regularly, subject to the company's performance.
