Ryder Stock Rises More Than 3% Following Dividend Hike

Shares of Ryder System, Inc. R performed well on the bourse on Jul 12, 2024, closing the trading session at $128.75 per share, up 3.02% from the previous day's closing. The upside was owing to the dividend hike announcement by Ryder's board of directors.

In a shareholder-friendly move, R's board of directors has approved a dividend hike of 14.1%, thereby raising its quarterly cash dividend to 81 cents per share ($3.24 annualized) from 71 cents ($2.84 annualized). The raised dividend will be paid out on Sep 20, 2024, to shareholders of record at the close of business on Aug 19. The move reflects R's intention to utilize free cash to enhance its shareholders' returns.

This marks Ryder's 192nd consecutive quarterly cash dividend. Notably, Ryder has been making uninterrupted dividend payments for more than 48 years.

Ryder System, Inc. Dividend Yield

Ryder System, Inc. dividend-yield-ttm | Ryder System, Inc. Quote

Ryder has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging. During 2021, Ryder rewarded its shareholders through dividends of $122 million and repurchased shares worth $57 million. In 2022, Ryder paid dividends of $123 million and repurchased shares worth $557 million. In 2023, Ryder paid dividends of $128 million and repurchased shares worth $337 million. During first-quarter 2024, Ryder paid dividends of $35 million and repurchased shares worth $51 million.

Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks, like R, are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario. 

R's management's decision to increase its quarterly dividend payout reflects the company's commitment to boosting shareholder value apart from underlining confidence in its business. We believe such shareholder-friendly initiatives should boost investor confidence and positively impact this Zacks Rank #3 (Hold) company's bottom line.

Notably, shares of Ryder have gained 45% over the past year compared with 28.9% growth of the industry.

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Ryder is not the only player from the Zacks Transportation sector that has rewarded its shareholders with dividend payouts or share buyback programs. To name a few, on Jun 20, 2024, Delta Air Lines DAL management announced a 50% hike in the quarterly dividend payout. This was the first dividend increase announced by DAL since its resumption of quarterly dividend payments last year following the COVID-induced hiatus. The decision reflects DAL's shareholder-friendly approach. Financial prosperity owing to strong passenger revenues may have led to the dividend hike.

Delta Air Lines raised its quarterly dividend to 15 cents per share (annualized 60 cents per share), representing an increase of 50% over the previous payout of 10 cents per share (annualized 40 cents per share). The new dividend, which has been approved by the company's board of directors, will be paid on Aug 20 to shareholders of record as of the close of business on Jul 30, 2024.

On Jun 10, 2024, FedEx Corporation's FDX board of directors approved a dividend hike of 10%, thereby raising its quarterly cash dividend from $1.26 ($5.04 annualized) per share to $1.38 ($5.52 annualized).The raised dividend was paid on Jul 9 to shareholders of record at the close of business on Jun 24, 2024.

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