MONTREAL – BCE said Thursday that it is increasing its dividend by 5% for 2012, plus will use surplus cash to buy back up to $250 million worth of shares.
The communications giant also said that it will make a $750 million voluntary prepayment this month to Bell Canada's defined benefit pension plan to reduce its future pension obligation.
The BCE annual common share dividend will increase by 10¢ to $2.17 per share, effective its first quarter 2012 dividend payable on April 15, 2012 to shareholders of record at the close of business on March 15, 2012. This increase maintains BCE's payout ratio conservatively within its policy range of 65% to 75% of adjusted earnings per share.
"Supported by our outlook for continued earnings growth and strong free cash flow generation, and consistent with our dividend growth model, we are increasing BCE's common share dividend by 5% to $2.17 per share for 2012," said George Cope, President and CEO of BCE and Bell Canada. "This reflects our confidence in delivering on our business plan, based on the Bell team's strong execution of our strategic imperatives and reinforced by a healthy balance sheet with ample liquidity. We have the financial flexibility to reward shareholders, while supporting significant ongoing capital investment in Bell's broadband networks and services."
